Wind plant under way, but legal challenges come from all corners

MONTEREY — After a bond was posted late Friday, site work and earth moving began over the weekend to build Virginia's first industrial wind generating utility.

Following seven years of debate and controversy, Highland New Wind Development LLC is moving forward with its plans for 19 towers and 38 megawatts of capacity on Allegheny Mountain, at an estimated price tag of $80 million.

The project's future, however, is far from certain. Legal challenges on several fronts are surfacing from citizens, attorneys, state agencies, and the State of West Virginia — all asserting errors and omissions in plans approved by the county Aug. 3.

In the middle of it all, the Virginia Department of Conservation and Recreation, Natural Heritage Division, has been the first agency to respond with comments after reviewing plans, and says a survey of endangered species and habitats is in order. DCR told the State Corporation Commission Monday several state and global rare species are documented in the project area and a complete survey of those should be done to minimize harm. Everything from water shrews to a special type of swamp, DCR said, may exist in the vicinity of the construction site.

What this means for continuing work remains to be seen.

HNWD hired A.L.L. Construction to oversee preparation on the property owned by Henry T. "Mac" McBride and his family.

HNWD footed a bill for $3,557 to pay for expenses incurred by Highland County to have plans reviewed by engineering firm Mattern and Craig, and then secured its land-disturbing permit with a $139,348 bond.

County attorney Melissa Dowd helped prepare bond documents. They include the permit for A.L.L. Construction Inc. of Mt. Storm, W.Va., to disturb more than one million square feet of land. A.L.L. accepted responsibility for carrying out the Erosion and Sediment Control plan, conforming to county regulations, and also agreed maintain "conservation measures in satisfactory operating condition until final, permanent stabilization is achieved."

The permit can be revoked if Highland authorities determine the project is not in compliance. It covers site work estimated at $116,123 for building the entrance to Red Oak, building the road to the substation and road between three turbines, and clearing and grading those turbine sites and the substation site.

Jason Kitzmiller, principal for A.L.L., signed as the responsible party.

In addition, McBride had to sign a statement as guarantor for himself, and his heirs and successors, as managing member of the company. He guaranteed the work of A.L.L. under the E&S performance bond, and agreed to bind himself, HNWD, and his Red Oak Ranch LLC.

Documents also included a "power of attorney" statement from First National Insurance Co., which appointed Kimberly Miles, Janis Peacock, Douglas Taylor, Andrew Teeter, Donna Price and Pamela Lanham of Charleston, W.Va. as "true and lawful attorneys-in-fact, with full authority to execute on behalf of the company fidelity and surety bonds … and to bind First National Insurance."

Site work started the day after the documents were signed and notarized — only two days before HNWD believes its local conditional use permit for the project would have expired.

Highland building official Jim Whitelaw visited the site Friday and again Monday. He said officials from DCR overseeing erosion and sediment control plans accompanied him Monday.

The E&S plan approved by the county July 27 has already been called into question. Downstream landowners Lucile Miller and McChesney Goodall gave the county and HNWD a 15-notice of intent to pursue legal action if the E&S plan isn't revised. Based on comments from a DCR official and a hired consultant, they believe the E&S plan does not fully meet state regulations for protecting the eco logically sensitive Laurel Fork watershed (see related story).

Also this week, Pocahontas County commissioners decided to seek legal advice, and potential court action, because one or two of the towers are within a few feet of the border with West Virginia and no legal agreement has been reached about the state line surveyed by HNWD; that field survey concluded the state line shown by U.S. Geological Survey maps is off a little. Pocahontas officials researched West Virginia state law, and said statute in their state requires such adjustments to USGS lines be authorized by their legislature (see related story).

At the same time, there are others asserting HNWD is not meeting requirements set out at the state level. Highland citizens represented by attorney James Jennings of Woods Rogers wrote the State Corporation Commission Monday, asserting HNWD has failed to meet at least three of the conditions attached to its state permit. Jennings said Tuesday he believes according to "arcane" SCC rules, the agency's attorneys are responsible for making sure applicants comply with SCC orders; his letter was addressed to SCC chief counsel, requesting that HNWD prove it's meeting those conditions. It also asks that HNWD be required to stop construction until that evidence is provided (see related story).

Tuesday, Highland supervisors went into a closed session with county attorney Melissa Dowd to discuss potential legal challenges to the E&S plan and the state border survey. They emerged more than an hour later, and supervisor Robin Sullenberger said, "We had an incredible, healthy debate with all three supervisors actively engaged. We expressed our opinions."

The board agreed to respond to the landowners with a letter from Dowd, referencing DCR's site visit.

Sullenberger told The Recorder Wednesday that DCR officials have done an inspection, and will review HNWD's Storm Water Pollution Prevention Permit Wednesday. And, he said, DCR officials will return again Monday. "They are very actively engaged," he said. "They are offering suggestions to the contractor, and those are being very well received."

A.L.L. Construction has worked on at least four similar wind utility projects, including the Tucker County facility near Mt. Storm. "They are very adept at this kind of construction activity," Sullenberger said.

"There will be no action on the second issue (potential litigation from Pocahontas). Dowd is to do further research," he said at the meeting.

Wednesday, he said he wasn't sure whether the state line issue was political or legal. "We consider it to be more political in nature, and we believe it could be rectified by professionals who can fix this problem," he said.

As the heavy equipment rolled up to the 4,400-foot crest of Allegheny, McBride issued statements through a press release this week.

"This is a day we have long waited for," he said. "For many years, I looked forward to helping the environment and the Highland community, while preserving our family's land for future generations. Development of this wind project will achieve each of these goals as well as open new doors for renewable projects in Virginia. We are proud to have blazed the trail to a renewable energy future for Virginia right here on our property in Highland County."

According to the press release, "Early construction activities include: site preparation, foundation prep, installation of construction entrances, installation of erosion and sediment control, and road building" on 220 acres of the 4,000-acre McBride family tract.

The family will lease land to its closely held limited liability corporation, and HNWD will use 19 Gamesa G87 wind turbines. The company says its utility will provide about $200,000 a year in tax revenue for Highland. Legislation has been introduced repeatedly in Virginia's General Assembly over the years seeking to give renewable energy projects a tax break, but has so far been defeated.

HNWD says financing and power purchase agreements are still being negotiated, but the utility is expected to be online by mid-2010.