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Trust, Teamwork Keys to Gratiot’s Windpower SuccessPrint

Clean Energy | August 14, 2012 | By Jim Dulzo

Gratiot County’s new wind farm is an economic boon to its farming community and continues to enjoy strong local support. (Photo courtesy of Michigan Energy Michigan Jobs)

Part 1 of a two-part series. Read Part 2 here

BRECKENRIDGE, Mich.—Two months after Michigan’s largest wind farm kicked into high gear, local support remains strong for the 133-turbine, 212-megawatt Gratiot County Wind Project, which literally surrounds this small, mid-Michigan farming town.

The project spreads across four townships and 30,000 acres of tabletop-flat farmland in Gratiot’s windy northeast corner. A drive along the area’s main highway, M-46, reveals that the turbines have dramatically changed this farming community’s landscape: The big machines seem to be everywhere.

But local business people say that while they hear some complaints from their customers about the nearly 500-foot-tall machines, most seem glad to see them in place. They like the local wealth and clean energy it generates on breezy days. Local officials say they largely hear the same thing.

This November, if Michigan voters approve the popular “25 x 25” clean energy ballot initiative,  which requires 25 percent renewable energy by 2025, other windy farm communities could be vying for their own utility-scale windpower development.

Gratiot’s successful experience offers those areas a textbook case on how to attract wind development, and then build community support for it.

Interviews with local officials like Don Schurr, director of Greater Gratiot Development Inc., the county’s economic development agency, and Richard Vander Veen, the windpower developer, indicate that winning community-wide acceptance requires more than waving generous royalty leases at an area’s largest property owners.

According to both Mr. Schurr and Mr. Vander Veen, it is crucial to build trust throughout the community well before lease-signing begins.

They also point out that Gratiot had a big advantage: countywide cooperation on economic and planning issues via a countywide master plan and economic development strategy.

That kind of cooperation quickly allowed Gratiot and its 16 townships to implement Michigan’s first county wind farm ordinance; each township board approved it by unanimous vote. Mr. Schurr and Mr. Vander Veen say that made Gratiot more attractive to developers by eliminating the welter of differing township rules that make such projects more risky and expensive.

The formula is working: Chicago-based Exelon Corporation is now constructing its 34-turbine Beebe Community Wind Farm just south of here, scheduled to go online by the end of the year. Other projects are in the works, but likely will not move forward, according to Mr. Schurr, until the companies can sign power purchase agreements with utility companies.

Approval of the 25 x 25 renewables initiative would help with that, clean energy advocates point out. Michigan now has 15 wind farms either operating or in development. Together, on a windy day, they could generate slightly more than 1,082 MW of clean power—the output of one very large coal plant.

Who Do You Trust?

According to Mr. Vander Veen, getting Gratiot’s residents to trust his company, Wind Resource LLC, required a slow, yet simple process: talking to lots of people. He often jokes that it took “about 50 cups of coffee per megawatt” as he chatted in kitchens and local restaurants with people who wanted to know more about his proposal.

“We worked with some of the largest families in the community who then put us in touch with their own, personal networks, and those people then did the same thing,” he explained. “So, you end up respecting everybody.”

The developer then attended community meetings where people were encouraged to ask questions, raise objections, and learn as much as possible. They included sessions with Future Farmers of America members; educators; local, state and federal officials; MSU Cooperative Extension staff; and Michigan Farm Bureau members and officials.

“We did a listening tour, finding out what peoples’ values are,” he said. “It’s important to remember that we are invited guests, and we can’t impose anything.

“That is why we chose the co-operative, community participation model,” he added, referring to both the open-ended way he communicated and the leasing arrangement he offered. Everyone who signed up received payment, whether or not a turbine landed on their property.

“As I said in my TEDx talk in Marquette, we were trying to contrast our approach with that of a utility trying to impose, say, a Texas approach,” he explained, “where it’s just a few very large landowners, instead of a lot of small ones, like in Michigan. If you start by deciding what you’re going to do and then just defending it, it doesn’t get you very far.”

Or, as he told Midwest Energy News recently, “We know that you don’t just get consensus; you have to earn it.”

Let’s Get Together

When Mr. Vander Veen began approaching people in Gratiot County, he already had a powerful ally: strong collaboration among Gratiot County and its townships, even when a project helped just one local government.

It was always clear, for example, that the wind farm’s property tax payments would not benefit any of Gratiot’s towns since the machines would be outside their borders. But that didn’t stop Breckenridge Village Manager Jeff Ostrander from supporting the project, as he explained on a local website

“Our community doesn’t get any of the tax revenue, but it’s so important because we see the bigger picture,” he said. “Outside of Breckenridge, when you start going into the other towns--Ithaca, Alma, St. Louis—all those community leaders are gaining nothing from this project, either. But they see the bigger picture, too.”

That bigger picture emerged in the late 1970s, according to Mr. Schurr, when the county formed Greater Gratiot Development to counter several hard blows to the local economy, including the demise of major local employer Michigan Chemical due to PBB-livestock feed poisoning, and the closure of several auto parts factories due to the Arab oil embargos.

“We had a 21 percent unemployment rate,” Mr. Schurr recalled. “The community decided, ‘This isn’t working. So we are going to get together, toss away our parochialism, and form an organization dedicated to the county’s economic development.’ It has continued to evolve from that over the years.”

Today the county has a single economic development agency, brownfield authority, and hospital authority, and a unified approach to other agencies and services, too.

“This kind of understanding—that we work together as a larger market for the benefit of the wider community—has moved from being an unusual to an expected occurrence in Gratiot,” he said.

Gratiot established one of the state’s first countywide strategic plans in the early 1990s, followed by a countywide master plan. And when officials learned that wind companies were checking out Gratiot, they took a logical step—inviting residents to help them formulate countywide windpower zoning.

“We got together anybody who wanted to participate, and did a lot of research,” Mr. Schurr said. “MSU was very helpful. We had packed community forums, and we came up with a model wind ordinance.”

Big Benefits

Many of the financial benefits that the new wind farm is providing to local governments and schools are easy to tabulate.

The owners of the $440 million wind farm—DTE Energy and Invenergy—will jointly pay about $50 million in taxes to local schools, townships, and the county over the next 20 years. According to Mr. Vander Veen, that’s more than the total now paid by the county’s top 10 taxpayers.

That represents a significant tax revenue boost. For example, The Saginaw News reports that the $60,000 in new revenue that rural Bethany Township will collect every year represents about a quarter of its annual budget. The money could help improve roads or lower the township’s current one-mill property tax.

Breckenridge Community Schools also benefits. It expects about $5 million in wind tax money over the next 20 years, allowing the school system to upgrade its badly worn electrical, lighting, heating, and plumbing systems.

Audrey Westall, owner of the Hair Parlor, in Breckenridge, is happy about the help for the school, without which it “would probably be folding up in two years,” she said. “We are very fortunate to have the wind farm here.”

But the project helps in other ways—starting with keeping local restaurants busy during construction. The turbines now require 15 technicians to keep them spinning.

Mr. Vander Veen calls the other big benefit of his project “Wealth from the Wind.” More than 250 families who signed the project’s unique pooling easement agreement will, among them, receive an estimated $2 million per year in royalty payments. The developer said that everyone living within the 35,000-acre project area was invited to sign a lease. Farmers received a $1,000 bonus payment when they signed, with or without turbines on their property. Those who ended up with turbines on their property do receive an additional sum, but it was kept small, he said, in order to keep the general “pool” payments as large as possible. All told, the project removed only about 300 acres from active farming.

“It’s roughly equivalent to having an industrial development with 50 good-paying jobs,” Mr. Schurr said. “And that money will be spent, not invested—on a new tractor, a new barn, a new pickup, an addition to the house, going to dinner more often. It’s really a continuous shot into the local economy.”

He added that the turbines helped build the county’s new industrial park, just outside of Breckenridge. One building hosts a new turbine maintenance facility. 

And, to deliver the turbines’ 212 MW of electricity, the grid transmission company ITC spent $30 million on electrical substations.

“That’s all taxable property,” Mr. Schurr said, “and it will also make us very reliable electrically. Maybe we can attract some other kinds of businesses because of our improved energy infrastructure.”

County commission chair Jeff Anderson said that Gratiot’s turbines are attracting more people to the community.

“People come in here to take a look at the turbines, and then they do some shopping,” he said. “That was part of our overall design, of better promoting the area.”

The new tax receipts are also financing water and sewer expansion, so when outside businesses are interested in the area, the county is ready.

“In a buyers’ market, you can’t say ‘in six months we’ll have water and sewer,’” he pointed out. “Now, wherever those new companies go—St. Louis, Breckenridge, Alma—we will all be happy, because we will all benefit.”

And while the turbines may be helping Gratiot grow in new or unexpected ways, Mr. Schurr notes that they are also making sure that the county’s most crucial feature remains untouched.

“Everybody here puts a high value on the preservation of land,” he said. “You put in a wind farm, all you do is farm. So all of the municipal people see the wind farm as an accomplishment that fits with the countywide master plan that everybody supported.”

Jim Dulzo is the Michigan Land Use Institute’s senior clean energy policy specialist. Reach him at jimdulzo@mlui.org