Renewing the energy debate: States are expanding their use of renewable energy to protect themselves from fluctuating energy costs and to rejuvenate rural economies.

Kevin Willert's family has farmed the Buffalo Ridge area in southwestern Minnesota for more 100 years, but now he has a new crop: the wind.

Willert heads a landowners' association that leases land to developers who build wind turbines to generate electricity. In return for the use of their property, Willert and his neighbors receive annual royalties based on the productivity of the turbines.

"The dollar amounts vary, but the most productive ones can each bring up to $3,000 a year," he says.

Not bad when you consider that soybean and corn annually gross around $300 an acre in this region. Each of the large, modern turbines occupies less than an acre and, according to Willert, is compatible with traditional land uses. "You can plant crops up to about 40 feet from the base, and they don't bother the cattle. My cows rub against them all the time," he says.

The wind turbines are also a benefit to the community--they've become somewhat of a tourist attraction. Willert describes the slender tubular towers as "more aesthetically pleasing" than what people envision. "People used to drive straight through the area, but now they stop to ask about the turbines," he says. "I'm not sure how many tourist dollars they generate, but it's enough that the local business people talk about it."

Wind, solar power and geothermal energy won't replace fossil fuels as the prevalent source of energy any time soon. But using renewable energy in tandem with traditional fuels can protect the nation's economy by extending the life of domestic fossil fuel resources. Renewables also enhance national security by reducing our reliance on the fuels we import from consistently volatile regions of the world.

Many states are expanding their use of renewable energy in order to diversify their energy and economic options. This balanced energy approach offers protection from unpredictable surges in fuel costs, as was the case in 2001 when natural gas prices quadrupled. In addition, states are interested in the revenue that renewable energy technologies can generate.

"States are leading the charge to develop domestic renewable energy resources," says P. J. Dougherty, national coordinator of the Department of Energy's Wind Powering America Program. He says lawmakers are interested in ways to protect consumers from high fuel prices and in creating economic development for rural communities.

HARNESSING THE WIND

The nation's "wind belt" blows across an area stretching from Texas to Minnesota to the Pacific Northwest and down through parts of the Southwest. Wind in North Dakota and South Dakota alone is so great that, theoretically, it could generate enough electricity to power the entire nation. Large-scale, commercial wind farms are operating in 22 states, and dozens of new projects are planned. California, Colorado, Iowa, Kansas, Minnesota, Oregon, Texas, Washington and Wyoming lead the way. Projects in New York, Pennsylvania and Vermont are tapping wind resources in the East. The capacity of the nation's wind power plants doubled from 1999 to 2001 (to nearly 4,300 megawatts), but they still produce only a very small amount of U. S. energy

The expansion of wind power has been a boon to struggling farmers and ranchers who can get annual royalty payments of between $1,500 and $2,500 for each turbine placed on their property. However the amount depends on the strength of the wind. Word of these lease agreements is spreading throughout many rural communities. Last year, the North Dakota State Energy Office held a series of meetings that focused on wind power and economic development. "In each town, the crowds got larger and larger," says Representative Scot Kelsh of Fargo. "Farmers are economically depressed, and this opportunity is good news to them."

Willert suggests proceeding with caution, though, when developers come knocking. "Many landowners in Minnesota entered poor lease agreements because these are relatively new types of land leases. Landowners should organize, share information and get everything in writing. They have a lot to lose if they don't," he warns.

Large, commercial wind farms can generate a lot of property tax revenue for counties, too. The National Wind Power Site in west Texas annually generates around $400,000 for the county, plus an additional $100,000 for schools throughout the state. In its first year of operation, the Foote Creek Rim Project in southern Wyoming generated $480,000 in property taxes for Carbon County. In Minnesota, a 155 megawatt project provided Lincoln County with $721,000, while Pipestone County received $532,000 from a 113 megawatt plant in 2000.

CONSUMER DEMAND

"The economic development that wind power is bringing to some rural areas is exciting, but wind is also attractive to the general public," says Representative Tom Sloan of Kansas. "Electricity customers are demanding it because they see wind power not only as a free energy resource, but they also like the fact that it's free of pollutants," he says.

Electric utilities in nearly 30 states now offer customers the option to purchase "green power," that is, electricity generated using renewable resources. This electricity is typically sold in blocks of 100 kilowatt-hours and costs between $2.50 and $5 extra. Customers seem willing to pay a premium to support renewables. In fact, these so-called "green pricing programs" in Colorado, Michigan and South Dakota have customer names on waiting lists until more turbines are built to meet the demand. Some utilities have built wind farms in southern Wyoming specifically to meet the demand for green power in nearby Colorado and Utah.

Pennsylvania customers have the option of choosing who they buy electricity from. Around 120,000 have switched electric providers. "Consumers have options in our state, and they are willing to pay for electricity from renewable sources," says Representative Ellen Bard. "When people are given the choice to purchase green power, they will. Pennsylvania proves that."

Over the year, the cost of wind-generated electricity has fallen consistently as the turbines become more efficient and reliable. The price per kilowatt-hour has gone from $38 in 1980 to between $.03 and $.06 cents today, which makes it competitive with traditional fossil fuels. Modern wind turbines are large, sleek machines that stand nearly 200 feet tall and can generate a hundred times the amount of electricity of earlier models.

Mark Morgan has 34 of these turbines on his ranch in Big Springs, Texas. He says nobody complains about the visibility of the turbines or the noise. "We got accustomed to them fairly quickly. As far as a noise, usually the sound of the wind itself drowns out the spinning blades. It's like the sound of traffic to people living in the city--after a while it's natural background noise." Visibility and noise however, are areas of concern when trying to site turbines in more densely populated areas in the Northeast.

BARRIERS TO OVERCOME

The largest technical barrier facing the wind power industry is the difficulty of transmitting electricity from wind farms to consumers. Many good wind resources are in sparsely populated, remote areas. Delivering power to cities that need it most can be difficult. "Once turbines are erected, the next challenge is to deliver the electricity out of North Dakota to markets like Minneapolis or Chicago. The trouble is that there are no existing power lines large enough to do that," says Representative Kelsh. In fact, the electricity transmission infrastructure in much of the country is woefully inadequate.

Expanding it is likely to be a contentious issue in the near future, not only for windrich states, but also in most regions of the country. Building power lines is an expensive endeavor that often faces strong opposition from people living near a proposed route.

The main environmental concern about wind farms is birds colliding with spinning turbine blades. When the first commercial wind facilities were constructed in California in the early 1980s, developers did not understand how to site them properly. During the last 20 years, researchers have learned so much about the interaction between bird behavior, topography and turbine technology that they now can greatly minimize the effects turbines have on birds. Today, wind farms average less than one bird death per turbine per year.

The threats that wind farms pose to birds can be minimized if turbines are placed with caution, says Karin Sinclair, avian projects manager for the Department of Energy's National Renewable Energy Laboratory.

"The wind industry has learned a lot over the last decade," Sinclair says, "but wind projects can still be hazardous to birds if they are sited irresponsibly.

"It's not about old turbines vs. new ones," she explains. "It's about placing them properly so that the risks are minimized."

Sinclair points to the Foote Creek Rim Project in Wyoming as an example of how wind farms and birds can safely coexist. "The turbines there are placed well away from the areas of high raptor activity and consequently, there have been no significant, negative impacts on raptors there like there have been at the older sites in California," she says.

In North Dakota, Kelsh says, there has been some concern about birds colliding with turbines. But he and others have made sure that wind industry advocates work closely with regulatory agencies and interest groups, like hunters and environmentalists, to alleviate any perceived threats. "Until recently, the U.S. Fish and Wildlife Service did not allow wind turbines on federally leased lands," says Kelsh. "They do now because they believe that the industry is siting projects appropriately. They also understand that the latest generation wind farms in Minnesota and Iowa are not nearly as threatening to birds as older wind farms are."

DIFFERENT STATE APPROACHES

Kansas and Texas provide examples of different approaches that states are taking to encourage the use of wind and other renewables. Texas has a "renewable portfolio standard" as part of its electric utility restructuring legislation that requires electricity retailers in the state to provide a certain amount of power from renewable energy resources. Under this law, Texas will surpass California as the top ranking state in use of wind capacity in the next few years. The Legislature chose to develop wind power because of the economic development potential of large wind farms, consumer demand for renewable energy and poor air quality in certain parts of the state.

Kansas, on the other hand, uses property tax incentives to lure wind companies. Florida Power and Light recently took advantage of a property tax break to construct a 105 megawatt wind farm near Montezuma, Kan., the first of its kind in the state.

Representative Sloan is glad to see wind power come to his state and believes that the tax breaks work. "Minnesota and Iowa have shown that wind is a cash crop. Mandates have been effective in other states, but we chose tax incentives as a way to develop our domestic wind energy resource. Our property tax incentive is working, and we expect it to encourage even more development," he predicts.

Although mandates can boost renewable energy, commercial-scale wind projects are taking root in states like Iowa, Oregon, Washington and Wyoming without the benefit of mandates or restructuring legislation. And lawmakers in North Dakota and South Dakota are going the way of Kansas with a variety of new laws that provide property, income and sales tax incentives to encourage wind developers to move into the state.

POWER FROM THE SUN

Although Sloan's state of Kansas can use its strong and consistent winds to generate electricity, it can also garner power from a much different technology.

The sun showers the Earth with a nearly infinite supply of energy. Photovoltaic technology (commonly referred to as PV) uses solar panels to convert light from the sun into electricity. Although the greatest amount of solar energy is spread across the southwestern United States, PV can be used almost anywhere because normal daylight is all it takes for such a system to operate effectively. Even rainy Oregon is set to install solar panels on the Capitol roof to power the floodlights that illuminate the Golden Pioneer statue atop the building.

One of the benefits of solar power is that sunlight is more widespread than wind or geothermal resources. Consequently, it can be tapped in remote and urban settings. The main obstacle to wider use of photovoltaics is its relatively high capital cost. Although costs have declined by a tremendous amount in the last 20 years, PV-generated electricity still runs between $.15 and $.30 per kilowatt-hour; considerably higher than electricity generated from other sources because the equipment is costly when compared to the amount of power it can generate.

The mobility of PV systems, however, makes them suited for a variety of uses. Solar panels have been used for years to light road warning signs, streetlights and billboards. Farmers also use them to pump groundwater, aerate fishponds and power electric fences. In addition, PV panels are used in more remote areas to power communications stations, navigation buoys, offshore drilling platforms and emergency telephones.

Some customers in urban areas are using solar systems to help protect against volatile energy prices and disruptions in power supply. Programs in New York and California that help customers purchase PV systems have been wildly successful over the last two summers. One promising application for PV is its potential to generate power for the electricity grid during times of high demand. Electricity use is greatest in summer afternoons and early evenings, exactly the same time that solar radiation is greatest.

Solar power is gaining a niche as a small-scale, highly mobile way to generate electricity. In many respects, it competes in a completely different market from fossil fuels and wind power. Chicago and Las Vegas provide examples of how valuable PV can be when electricity is unavailable or simply too expensive.

Solar systems provide some power to many Chicago schools, transit facilities and museums throughout the year. As a result of the 1995 heat wave that left hundreds dead, the city began using this technology as a crisis management tool. Solar panels were installed on some schools to provide electricity for cooling in the event of future brownouts or blackouts triggered by heat waves. Schools in lower income neighborhoods were chosen because many people living there do not have air conditioning. These facilities will serve as "cooling centers" for citizens in the event of another crisis.

Add solar panels to the list of interesting things to spot along "the Strip" in Las Vegas, In the mid-1990s, the city constructed bus stop shelters along its famous boulevard, but forgot to include security lighting. Although electricity is easily available--in some cases underground wires are less than 50 feet away from the shelters--the local utility, Nevada Power, decided to rely on solar panels for lighting because they were cheaper than digging up the street and laying power lines.

Although solar energy remains the power source of choice for those living beyond the reach of power lines, remote residential applications constitute only a small portion of total use.

THE WAVE OF THE FUTURE

Kansas Representative Sloan says the public doesn't need to be coaxed to use power generated from renewable resources, but more has to be made available. "Public opinion polls show that citizens overwhelmingly support it," he says, "because it's cost-effective and can be used in concert with traditional fossil fuel plant operations." State lawmakers need to consider incentives to stimulate electricity generation from renewable resources, he says, which is not only popular with the public, but can be beneficial to rural landowners and increase energy self-sufficiency.

"Legislators and regulators can provide minimal or no-cost incentives to individual landowners, utility managers and other interested parties to invest in renewable technologies that enhance a state's energy self-sufficiency" Sloan says. "It's something we all have to look at."

U.S. ENERGY CONSUMPTION BY SOURCE, 1999

From 1998 to 1999, electricity generated from wind power increased 50
percent and geothermal use increased 14 percent.

ALL ENERGY SOURCES
(96.4 quadrillion Btu)

Coal                      23%
Petroleum                 39%
Natural gas               23%
Nuclear electric           8%
Renewable energy           8%

RENEWABLE ENERGY SOURCES
(7.2 quadrillion Btu)

Solar                      1%
Geothermal                 5%
Biomass                   44%
Wind                       1%
Hydroelectric             49%

Totals may not equal sum of components due to rounding.

Source: Energy Information Administration, 1999

Note: Table made from pie chart
SOLAR ENERGY USES IN 1999

Many people incorrectly believe that solar power is used mostly in
remote homes, when in fact this made up only 6% of its overall use in
1999.

Grid-connected (homes, schools, office buildings)  30%
Consumer goods (RVs, boats, calculators, watches)  18%
Other uses (telecommunications off-shore uses)     30%
U.S. off-grid residential (remote homes)            6%
Non-U.S. off-grid (rural areas)                    16%

Note: The power grid is the system for generating, distributing and
transmitting electricity. Off-grid refers to an area beyond the reach of
power lines.

Source: NCSL from PV Energy Systems Inc. data, March 2001

Note: Table made from pie chart

RELATED ARTICLE: USING RENEWABLE ENERGY TO LOWER AIR QUALITY VIOLATIONS

Supplemental environmental projects (SEPs) allow companies that violate air quality standards to receive a lesser penalty by investing in renewable or alternative energy. Money that states collect for these violations has traditionally gone directly into the state's general fund where it is used for a variety of purposes. States can use supplemental environmental projects to require that the money raised from penalties be used to alleviate the environmental condition the violation created.

In Colorado, a major commercial and industrial company is mitigating a violation penalty by purchasing wind energy from XCEL's Windsource program for five years at a cost that is 20 percent less than what the penalty would have been. Renewable energy in the state benefits because the utility must erect another turbine to meet this additional demand. The reductions in air emissions from this project are estimated to be:

* Total nitrogen oxide ([NO.sup.x]) avoided--97 tons per year

* Total sulfur dioxides ([SO.sup.2]) avoided--73 tons per year

* Total carbon dioxide ([CO.sup.2]) avoided--3,640 tons per year

WHAT STATES ARE DOING

It's not only states involved in electric utility restructuring that are developing programs to expand the use of renewable energy. Many states that maintain a regulated power market are also encouraging the use of renewables.

Disclosure and certification programs--Twenty-eight states require electricity generators to show their customers, via their monthly bill, the different mix of fuels used to generate electricity. Some states also require the disclosure of emissions produced as a result of generating electricity from these sources.

System benefit charges--Fifteen states levy a special consumption fee (usually a fraction of a cent per kilowatt-hour) on all electricity consumers. This money can be used to support renewable energy, energy efficiency or low-income energy assistance programs.

Renewable portfolio standards--Eleven states require electricity retailers to include a specific amount of renewable energy in the total resources they use to generate electricity. Percentages vary among states, but the annual amount required is commonly from 5 percent to 7 percent.

Tax incentives--Many states offer a combination of property and sales tax incentives to encourage the development of renewables. Some also allow an accelerated rate of depreciation for the equipment used to construct and operate wind farms. Twenty states now have property tax incentives, and 12 offer sales tax breaks.

Net metering--Thirty-four states allow individual, grid-connected customers who generate electricity using a renewable energy system to receive credit from their utility for any excess electricity they generate. Special two-way meters can measure both a customer's consumption and production of electricity. When generation exceeds consumption, the meter essentially runs backward. Net metering can be particularly beneficial for small renewable energy systems.

GREEN POWER COMES INTO ITS OWN IN NORTH CAROLINA 

This month North Carolina citizens get to choose electricity generated by such innovative, nonpolluting sources as sun and wind power. Consumers who are willing to pay an extra $3 to $5 per month can help support these 'green energy' projects within the state. The projects are sponsored by the state's two major utilities: Carolina Power & Light and Duke Power.

Through similar programs, more than a third of U.S. consumers can now choose green power. But North Carolina will become the first state to provide this option statewide. The energy consulting firm, Cardinal Energy, estimates the added charges could raise $10 million a year if 3 percent of the state's citizens take part in it.

Cardinal Energy sees the project as a good way to deal with concerns about coal-plant smog and the methane gas that is released from landfills and hog and poultry farms. Some of the green power will be generated by harnessing this gas to generate steam for power plants.

Research shows that 57 percent to 80 percent of consumers would pay a premium for renewable energy or environmental protection. North Carolina's green pricing program will become the newest among more than 85 utilities in 29 other non-deregulated states.

Christie Rewey

HOT WATER HOPE

Another important source of renewable energy derives from naturally occurring, underground streams of steam or hot water. The best and hottest domestic streams are located in the West, but useful low and moderate temperature resources are spread throughout the country. Geothermal power plants in the western United States provide around 2,200 megawatts of electricity each year. It is estimated that currently identified sources could provide more than 20,000 megawatts, and those not yet discovered could provide five times that amount.

Using geothermal energy directly and for heat pumps can save considerable amounts of energy. Low-temperature streams can be used to heat residential buildings and greenhouses and for agricultural purposes, such as farming fish and drying crops. Geothermal heat pumps discharge heat into the ground in the summer and extract it for winter use. There are more than 500,000 such systems across the United States in homes, schools and universities, and the number is growing.

Since only the hottest streams can be used to generate electricity, there is great potential for geothermal power plants to produce electricity for the growing populations of western states. Some key transmission lines that run from the Pacific Northwest to southern California cross some of the nation's best and hottest geothermal areas. Geothermal energy is similar to wind power in that the best resources are located in a specific area and that additional transmission lines are required to transport the electricity it generates.

Benefits

* Geothermal plants generate tax revenue, can pay royalties to landowners and states for land use, and create construction and maintenance jobs.

* If maintained responsibly, geothermal resources can be reliable for many years.

* Geothermal power plants typically operate more than 95 percent of the time, compared to 60 percent to 70 percent for coal and nuclear plants.

* Geothermal power plants emit far fewer air pollutants than fossil fuel plants.

* These power plants are small, require no fuel purchases and are compatible with agricultural land uses.

Barriers

* Like wind power, using much of the best resources requires an expansion of the electricity transmission system.

* Although costs have decreased in the last two decades, exploration and drilling remains expensive.

* Detecting good geothermal areas is difficult and often leads to dry wells.

* Siting and permitting can be cumbersome, especially on federal lands.

Troy Gagliano specializes in renewable energy policies for NCSL.