City negotiates wheeling rates for local wind farm

At a recent emergency meeting for the Kimball Board of Public Works, the board negotiated the following terms for the wheeling rate, the rate that is charged to transport electrical energy.

Sandhills Energy has agreed to make a one-time, upfront, payment of $250,000 to the City of Kimball for the wheeling rate.

Additionally, according to Kimball City Administrator Dan Dean, the company has agreed to the following conditions:

(a) Kimball Wind LLC pays the City of Kimball a facility charge of $2,500 per month with no annual escalation, equating to $30,000 each year over the initial 20-year contract period, resulting in $600,000 net revenue to the City.

(b) Upon extension of the PPA by MEAN and the project owner at the end of year 20 for an additional 10 years, we propose the facilities charge increase to $45,000 annually. This will provide an additional $450,000 of revenue to the City, bringing the total paid to the City over the anticipated useful life of the project to $1.05 million.

The above terms will be incorporated into a Generator Interconnection Agreement which will then need to be approved before they are finalized, Dean said.