Winds of Change

From one perspective, Richard and Roger Kas of Woodstock, Minnesota are typical Midwestern farmers who grew up farming the family land with their father, William. But this family has something unmistakably unique taking place on their farm: they are farming the wind.

With over 17 modern wind turbines on their land, they generate enough electricity to power 4300 households, and with two more turbines in the works, they are convinced they are riding the winds of change. What is more unique is that the Kas brothers will own these two new commercial-scale wind turbines. This is the first project of its kind in Minnesota, and possibly in the entire Midwest.

Wind development came about in Southwest Minnesota when the Legislature mandated that Northern States Power, now called Xcel Energy, contract 425 megawatts of wind-generated electricity by 2002. Landowners quickly signed leases giving the utility and wind development companies rights to put wind turbines on a portion of their land. The Kas family was part of this group of landowners and they chose their developer carefully.

The first 17 turbines on their land were developed by Dan Juhl of Danmar Associates, and have been up and running for two years. Roger says, “I wanted to get a project on our land. Dan was here first…we talked, but we had an agreement that if someone else came up with a project first and made us a good offer we would go with them. There were no exclusive agreements.”

Dan kept the Kas’s informed on the different aspects of planning, permitting, negotiating a power purchase agreement and arranging the financing. Beginning in 1993, Dan installed an anemometer tower to measure the wind on the Kas farm. Then in 1999, 17 machines were completely installed and producing power. The life of the machine is expected to be about 25 years and the power purchase agreement is also 25 years.

Farming the Wind

Roger’s interest and enthusiasm caused him to pay close attention to how the project came together on his land. “We’re here everyday feeding the cattle and taking care of the farm, and we see the wind turbines as just a few more machines for us to take care of. In that respect, you need to learn about the machines and take care of them just as you need to know how to take care of your crops and livestock.

Roger has worked in construction on and off all his life. While the wind project was being installed on the Kas family farm, the turbine manufacturer, Vestas hired Roger, for about six months to work on the construction and the machine maintenance. Roger believes that, “If you want to farm the wind, you should have…knowledge of how it all works.”

The “Little Guys” Succeed

“Right from the start, I thought if the big companies can get in it and make a go of it, the little guys can too,” said Roger. Dan said, “This is possible on a small individual scale but this is a commercial venture, it’s not a hobby.” Because the project is under 2 megawatts (2MW), they are not required toperform an environmental impact study. Also, Dan negotiated the Power Purchase Agreement with Xcel for the Kas brothers 2MW project. This is a key part of the project; this contract is the guaranteed long-term revenue for the sale of wind-generated electricity and what the capital financing is based on.

The Kas’s worked closely with Dan to arrange the financing. The process took more time than normal farm loans because they had to provide extra information and special attention to the local bankers to bring them along and get them interested in the wind project. It was all new to the lenders. They put 20% down and 80% was financed with the power purchase agreement as the loan guarantee. The multiple years of wind data and Dan’s project performance were evidence for the strength of the wind resource. “Every place is going to be different and you have to work it out,” says Roger, “Some land is better for raising corn and soybeans, while some is better for wheat and others are better for rice. In the same way, some land is better for wind.” The wind resource has to justify the capital investment.

Forging the Way

Roger knows he is forging the way with his project making it much easier for the next guy to put up a wind project. But he insists that “I am not giving anyone any advice now. I can’t give any advice until mine is up and running.” And it is a sure bet that the wind will keep blowing the Kas brothers’ way.