August 2, 2004
Tilting at windmills | Undaunted by setbacks, Harley Lee closes in on his dream to build a wind farm in western Maine
By Melissa Waterman
Harley Lee is an optimistic fellow. The 50-year-old founder of Endless Energy, based in Yarmouth, has spent 17 years trying to establish wind power facilities in New England. To date, though, he has just one small wind generator to show for it: a 50-megawatt turbine in Orland that produces electricity for blueberry processor G.M. Allen & Sons.
But Lee's faith in the economic and environmental benefits of wind power may soon pay off. After more than a decade in development ˆ during which time Lee has been beset by weather, competing energy companies and an ongoing quest to raise money from investors ˆ a planned wind farm on two mountaintops in Redington Township is nearing the construction phase.
In February, Lee completed the last of a series of real estate transactions to ensure rights of way for the wind farm's road and power line corridor on Redington Pond Range and Black Nubble mountain. This fall, the company also will finish the second of two seasons of biological studies on migratory bird and raptor flight patterns near the mountains. And finally, after 10 years of data gathering and planning, Lee is ready to submit an application for preliminary development approval to the state's Land Use Regulatory Commission, the legal body with jurisdiction over Maine's unincorporated townships.
If constructed, the Redington wind farm would use up to 29 turbines to provide 200 million kilowatt hours of electricity a year ˆ enough for 33,000 Maine homes. By providing a clean source of electricity, Lee estimates the farm could remove from the atmosphere about 600,000 pounds of pollution a day. It's an important goal for Lee, but at this point he says simply getting the preliminary development approval application submitted will be a milestone. "It's a four-inch-thick application and we have about another inch to add," Lee says dryly. "I will say 'hosanna' when the final project is up and running."
Despite his ambitious goals, Lee is quick to admit that his company hasn't yet made money producing energy. Rather, during the past 17 years, Endless Energy has kept itself afloat through a series of research contracts and by raising money from private investors. Though Endless Energy presently has three full-time contract employees, Lee is the company's only staff person.
That bare-bones operation isn't the typical model among wind energy companies around the world, or even in this country. According to the Washington, D.C.-based American Wind Energy Association, the industry has grown by 25%-35% each year since 1990, due in part to the fact that wind power emits no damaging greenhouse gases. The deregulated electricity market now allows customers to choose their energy suppliers, and many want to use renewable sources rather than electricity generated by coal or oil. Also, states have been setting targets for use of renewable energy. In Maine, for example, electricity suppliers are required to derive 30% of their power from renewable energy resources.
Still, Lee's saga is far from over. Once the Redington application is under review, Lee must court investors for $90 million to construct his dream. And even if it receives approval, the project could face further legal challenges like the first major wind farm permitted in Maine, the 50-megawatt farm at Mars Hill (see "Flight test," p. 17). "States like Texas and Pennsylvania can't build wind power projects fast enough," says David Van Wie, an energy consultant with Land and Water Associates in New Gloucester. "Harley's been ahead of the curve [in Maine] for a while now."
Business opportunities and social goals
A native of Chappaqua, N.Y., Lee graduated from the University of Tennessee and went on to gain a business degree from Duke University. Along the way, he grew interested in the financial and environmental aspects of renewable energy and conservation. He and his wife moved to Maine in 1986 from Washington, D.C., where Lee had spent 10 years as an energy consultant for Energy and Environmental Analysis, Science Applications Inc. and other environmental firms.
Looking to capitalize on what he saw as a good business opportunity as well as a social goal, the first thing Lee did upon coming to Maine was start his own wind energy business, Endless Energy Corp. "The equipment costs were declining, it's an environmentally benign resource and it just seemed to make good business sense," Lee explains. "Plus I find it all interesting ˆ doing the financial analysis, interpreting meteorological data, negotiating real estate deals. It calls for a diverse set of skills."
Over the years, Endless Energy performed wind energy feasibility studies for clients such as the University of Massachusetts and the Rhode Island Renewable Energy Collaborative. Those projects gave Lee a good understanding of the technical and economic pitfalls of wind power generation. At the same time, private investors allowed Endless Energy to explore its own wind power projects at Sugarloaf Mountain in Kingfield, in Redington Township and at Equinox Mountain in Vermont. For example, Lee has raised $2 million from investors for the study and permit stage of the Redington project.
Soon after creating his company, Lee launched his first wind farm development effort by approaching Central Maine Power. After several years of negotiation, in 1989 CMP finally entered into an agreement with Endless Energy to purchase 43 million kilowatt hours of electricity from an experimental wind farm. "It was a research contract," Lee says. "With CMP as a customer we could go off and do development work, negotiate for a site and gather data."
Lee promptly obtained a lease from the Sugarloaf USA ski resort to locate three wind towers on the mountain and chose Zond Systems from California to manage the construction ˆ but problems began to emerge. While the California firm had built wind turbine towers before, it had never done so in the East. Space was cleared atop Sugarloaf and a power line was in place halfway up the mountain, but the wind turbines lay disassembled in the resort's parking lot as summer turned into fall and quickly slipped into the winter of 1993-94. "By the time the California firm was ready to go, Sugarloaf said forget it," says Lee.
When construction of a new ski lift at the mountain was about to begin, the window for setting up the wind towers was closed. Then CMP cancelled Endless Energy's contract. "I was definitely daunted after that," Lee admits.
Daunted but not defeated, Lee began looking for other projects, eventually settling on the mountains in Redington Township as a possible location. Redington Pond Range and Black Nubble mountains lie along an unusually long and level north-south ridge, ideal for tapping into New England's prevailing westerly winds, and are situated near existing roads, power lines and critical grid substations. In 1994, Lee formed Redington Mountain Windpower LLC and started to negotiate for land and rights of way.
Lee first got a permit from LURC in 1994 to construct 11 meteorological towers to test wind strength and duration on the mountains. Since then, he has been negotiating with five landowners, securing the final land purchase this past February, and has spent $70,000 on biological studies examining the flight patterns of migrating birds near the mountain. Now, Lee is in the process of writing a permit application for the first five turbines in the Redington wind farm, which he expects to finish by the end of this month.
Throughout the process he's also constantly been in the public eye, talking about his project and trying to forestall opposition. "With a high profile project like this, people don't like surprises," Lee says.
Lee has spoken to local town boards, chambers of commerce, the Appalachian Mountain Club, the Natural Resources Council of Maine, the Sierra Club and Maine Audubon, among others. Thus far NRCM, Maine Interfaith Power & Light and the Maine Electric Consumers Coalition officially are in favor of the wind farm.
But the Appalachian Trail Conference, a nonprofit organization that oversees the status of the Appalachian Trail, has said it will intervene in opposition to the project when it comes before LURC. According to the organization's website, the ATC objects to the visual intrusion presented by the wind turbines in the Hundred Mile Wilderness section of the 2,000-mile trail.
In response to those concerns, Lee is concentrating on mitigating the visual impact of the Redington wind farm by hiding roads and power cables behind ridges and under trees, and by planning to use gray turbines, which he says will be less visible than the white turbines typically used in such projects.
Generating revenues
With much of the pre-construction planning complete, Lee has to find investors to put up the $90 million in construction costs. He expects experienced institutional investors, especially socially responsible investors including mutual funds and venture capital firms, to be his likely supporters. "Investors will get a steady revenue stream," says Lee. "We are projecting $10 million in revenues when the farm is running."
Assuming he can raise the money to build it, the Redington wind farm faces two simple obstacles, according to energy consultant David Van Wie: "Can he get his permits and will there be a market for his power?"
The latter question revolves around whether Congress passes the Renewable Energy Tax Credit, which is included in a federal energy bill that has been stalled for months. The measure provides a 1.5-cent credit for every kilowatt hour of electricity produced using renewable resources, a subsidy that can be crucial to helping find buyers for any wind farm's power.
But on that front, Lee says Redington Mountain Windpower has completed letters of agreement with several Maine colleges to purchase electricity from the as-yet-unbuilt wind farm. Though he declines to name most of those customers, College of the Atlantic in Bar Harbor announced in April that it would buy energy from the wind farm when available. The environmentally focused college presently spends approximately $40,000 on electricity a year, and COA President Steve Katona says that, at least initially, he's prepared to pay a bit more for power from renewable energy sources. "It's just the right thing to do," says Katona. "Wind power has comparatively low environmental and social costs compared to traditional fuels."
According to Lee, however, the cost per kilowatt hour of electricity generated by wind power is comparable to that of electricity generated from fossil fuels: approximately 6.5 cents. But unlike buyers of electricity derived from fossil fuels, says Lee, wind power customers won't face fluctuating prices every year. "You can lock in for 20 years," he says. "The supply isn't going to change."
Potential customers are going to have to remain patient in their wait for Redington's wind power, though. Once Lee submits his application for preliminary development, LURC must hold a public hearing on the proposal before issuing a permit. Then Lee has another 18 months before he must submit a final development application. Though it's conceivable Lee could begin construction next year, according to LURC officials, Lee himself won't specify when he expects to start building the wind farm, saying it's too early in the process to speculate.
Despite the regulatory and financial tasks left to perform, Lee remains optimistic that Endless Energy ultimately can achieve his original goal of creating a profitable company that provides renewable electricity. Noting the improving economics of wind power and what he sees as the inherent instability of the petroleum markets, Lee is convinced that wind farm projects like his will find their way into the economic mainstream. When told that he has been described by several individuals as "tenacious," Lee laughs. "That," he says, "and it helps to have a few screws loose."
But Lee's faith in the economic and environmental benefits of wind power may soon pay off. After more than a decade in development ˆ during which time Lee has been beset by weather, competing energy companies and an ongoing quest to raise money from investors ˆ a planned wind farm on two mountaintops in Redington Township is nearing the construction phase.
In February, Lee completed the last of a series of real estate transactions to ensure rights of way for the wind farm's road and power line corridor on Redington Pond Range and Black Nubble mountain. This fall, the company also will finish the second of two seasons of biological studies on migratory bird and raptor flight patterns near the mountains. And finally, after 10 years of data gathering and planning, Lee is ready to submit an application for preliminary development approval to the state's Land Use Regulatory Commission, the legal body with jurisdiction over Maine's unincorporated townships.
If constructed, the Redington wind farm would use up to 29 turbines to provide 200 million kilowatt hours of electricity a year ˆ enough for 33,000 Maine homes. By providing a clean source of electricity, Lee estimates the farm could remove from the atmosphere about 600,000 pounds of pollution a day. It's an important goal for Lee, but at this point he says simply getting the preliminary development approval application submitted will be a milestone. "It's a four-inch-thick application and we have about another inch to add," Lee says dryly. "I will say 'hosanna' when the final project is up and running."
Despite his ambitious goals, Lee is quick to admit that his company hasn't yet made money producing energy. Rather, during the past 17 years, Endless Energy has kept itself afloat through a series of research contracts and by raising money from private investors. Though Endless Energy presently has three full-time contract employees, Lee is the company's only staff person.
That bare-bones operation isn't the typical model among wind energy companies around the world, or even in this country. According to the Washington, D.C.-based American Wind Energy Association, the industry has grown by 25%-35% each year since 1990, due in part to the fact that wind power emits no damaging greenhouse gases. The deregulated electricity market now allows customers to choose their energy suppliers, and many want to use renewable sources rather than electricity generated by coal or oil. Also, states have been setting targets for use of renewable energy. In Maine, for example, electricity suppliers are required to derive 30% of their power from renewable energy resources.
Still, Lee's saga is far from over. Once the Redington application is under review, Lee must court investors for $90 million to construct his dream. And even if it receives approval, the project could face further legal challenges like the first major wind farm permitted in Maine, the 50-megawatt farm at Mars Hill (see "Flight test," p. 17). "States like Texas and Pennsylvania can't build wind power projects fast enough," says David Van Wie, an energy consultant with Land and Water Associates in New Gloucester. "Harley's been ahead of the curve [in Maine] for a while now."
Business opportunities and social goals
A native of Chappaqua, N.Y., Lee graduated from the University of Tennessee and went on to gain a business degree from Duke University. Along the way, he grew interested in the financial and environmental aspects of renewable energy and conservation. He and his wife moved to Maine in 1986 from Washington, D.C., where Lee had spent 10 years as an energy consultant for Energy and Environmental Analysis, Science Applications Inc. and other environmental firms.
Looking to capitalize on what he saw as a good business opportunity as well as a social goal, the first thing Lee did upon coming to Maine was start his own wind energy business, Endless Energy Corp. "The equipment costs were declining, it's an environmentally benign resource and it just seemed to make good business sense," Lee explains. "Plus I find it all interesting ˆ doing the financial analysis, interpreting meteorological data, negotiating real estate deals. It calls for a diverse set of skills."
Over the years, Endless Energy performed wind energy feasibility studies for clients such as the University of Massachusetts and the Rhode Island Renewable Energy Collaborative. Those projects gave Lee a good understanding of the technical and economic pitfalls of wind power generation. At the same time, private investors allowed Endless Energy to explore its own wind power projects at Sugarloaf Mountain in Kingfield, in Redington Township and at Equinox Mountain in Vermont. For example, Lee has raised $2 million from investors for the study and permit stage of the Redington project.
Soon after creating his company, Lee launched his first wind farm development effort by approaching Central Maine Power. After several years of negotiation, in 1989 CMP finally entered into an agreement with Endless Energy to purchase 43 million kilowatt hours of electricity from an experimental wind farm. "It was a research contract," Lee says. "With CMP as a customer we could go off and do development work, negotiate for a site and gather data."
Lee promptly obtained a lease from the Sugarloaf USA ski resort to locate three wind towers on the mountain and chose Zond Systems from California to manage the construction ˆ but problems began to emerge. While the California firm had built wind turbine towers before, it had never done so in the East. Space was cleared atop Sugarloaf and a power line was in place halfway up the mountain, but the wind turbines lay disassembled in the resort's parking lot as summer turned into fall and quickly slipped into the winter of 1993-94. "By the time the California firm was ready to go, Sugarloaf said forget it," says Lee.
When construction of a new ski lift at the mountain was about to begin, the window for setting up the wind towers was closed. Then CMP cancelled Endless Energy's contract. "I was definitely daunted after that," Lee admits.
Daunted but not defeated, Lee began looking for other projects, eventually settling on the mountains in Redington Township as a possible location. Redington Pond Range and Black Nubble mountains lie along an unusually long and level north-south ridge, ideal for tapping into New England's prevailing westerly winds, and are situated near existing roads, power lines and critical grid substations. In 1994, Lee formed Redington Mountain Windpower LLC and started to negotiate for land and rights of way.
Lee first got a permit from LURC in 1994 to construct 11 meteorological towers to test wind strength and duration on the mountains. Since then, he has been negotiating with five landowners, securing the final land purchase this past February, and has spent $70,000 on biological studies examining the flight patterns of migrating birds near the mountain. Now, Lee is in the process of writing a permit application for the first five turbines in the Redington wind farm, which he expects to finish by the end of this month.
Throughout the process he's also constantly been in the public eye, talking about his project and trying to forestall opposition. "With a high profile project like this, people don't like surprises," Lee says.
Lee has spoken to local town boards, chambers of commerce, the Appalachian Mountain Club, the Natural Resources Council of Maine, the Sierra Club and Maine Audubon, among others. Thus far NRCM, Maine Interfaith Power & Light and the Maine Electric Consumers Coalition officially are in favor of the wind farm.
But the Appalachian Trail Conference, a nonprofit organization that oversees the status of the Appalachian Trail, has said it will intervene in opposition to the project when it comes before LURC. According to the organization's website, the ATC objects to the visual intrusion presented by the wind turbines in the Hundred Mile Wilderness section of the 2,000-mile trail.
In response to those concerns, Lee is concentrating on mitigating the visual impact of the Redington wind farm by hiding roads and power cables behind ridges and under trees, and by planning to use gray turbines, which he says will be less visible than the white turbines typically used in such projects.
Generating revenues
With much of the pre-construction planning complete, Lee has to find investors to put up the $90 million in construction costs. He expects experienced institutional investors, especially socially responsible investors including mutual funds and venture capital firms, to be his likely supporters. "Investors will get a steady revenue stream," says Lee. "We are projecting $10 million in revenues when the farm is running."
Assuming he can raise the money to build it, the Redington wind farm faces two simple obstacles, according to energy consultant David Van Wie: "Can he get his permits and will there be a market for his power?"
The latter question revolves around whether Congress passes the Renewable Energy Tax Credit, which is included in a federal energy bill that has been stalled for months. The measure provides a 1.5-cent credit for every kilowatt hour of electricity produced using renewable resources, a subsidy that can be crucial to helping find buyers for any wind farm's power.
But on that front, Lee says Redington Mountain Windpower has completed letters of agreement with several Maine colleges to purchase electricity from the as-yet-unbuilt wind farm. Though he declines to name most of those customers, College of the Atlantic in Bar Harbor announced in April that it would buy energy from the wind farm when available. The environmentally focused college presently spends approximately $40,000 on electricity a year, and COA President Steve Katona says that, at least initially, he's prepared to pay a bit more for power from renewable energy sources. "It's just the right thing to do," says Katona. "Wind power has comparatively low environmental and social costs compared to traditional fuels."
According to Lee, however, the cost per kilowatt hour of electricity generated by wind power is comparable to that of electricity generated from fossil fuels: approximately 6.5 cents. But unlike buyers of electricity derived from fossil fuels, says Lee, wind power customers won't face fluctuating prices every year. "You can lock in for 20 years," he says. "The supply isn't going to change."
Potential customers are going to have to remain patient in their wait for Redington's wind power, though. Once Lee submits his application for preliminary development, LURC must hold a public hearing on the proposal before issuing a permit. Then Lee has another 18 months before he must submit a final development application. Though it's conceivable Lee could begin construction next year, according to LURC officials, Lee himself won't specify when he expects to start building the wind farm, saying it's too early in the process to speculate.
Despite the regulatory and financial tasks left to perform, Lee remains optimistic that Endless Energy ultimately can achieve his original goal of creating a profitable company that provides renewable electricity. Noting the improving economics of wind power and what he sees as the inherent instability of the petroleum markets, Lee is convinced that wind farm projects like his will find their way into the economic mainstream. When told that he has been described by several individuals as "tenacious," Lee laughs. "That," he says, "and it helps to have a few screws loose."
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