Electricity from the Wind...
Economic Development for Rural Communities
Special to the Nebraska Energy Quarterly

It may seem hard to believe, but according to the U.S. Department of Agricultureís 2003 farm income forecast, 94 percent of total farm household income comes from off-farm sources. Many rural families work off-farm jobs in addition to farming to make ends meet.

Dan McGuire, chief executive officer of the American Corn Growers Foundation, said that low commodity prices combined with high production costs are responsible for this. McGuire said that the farm income forecast is a compelling reason for farmers and ranchers to support wind energy because it provides a source of income and fosters economic development in rural communities. “Wind farming does pay,” he said.


Renewable Energy Wind Farm in Minnesota
Renewable Energy Wind Farm in Minnesota
Minnesota Pioneers
McGuire cites a Minnesota project that demonstrates why farmers, ranchers and rural communities should get involved with wind energy as a new source of income. The Kas Brothersí wind farm at Pipestone, completed in 2001, is the first farmer-owned commercial wind farm in the United States. Developer Dan Juhl installed two NEG Micon 750-kilowatt turbines with an estimated annual electricity production of 4.5 million kilowatt-hours. That wind farm now yields $30,000-$40,000 annually for the first 10 years of operation and is expected to yield $110,000-$130,000 annually thereafter, depending on the level of electricity production.

McGuire said this project is an excellent example of community-based economic development. Local contractors Olsen Electric and K-Wind participated. Xcel Energy contracted to purchase the electricity. Local banks provided the financing. The wind turbine, the power contract, the maintenance agreement and insurance allow the banks to make the loans with little risk. Local ownership also keeps the electricity revenue circulating in the community. This wind farm model is so successful that Juhl has several new projects in the works.

Texas Too
Although Minnesota has emerged as a leader in implementing wind energy in rural communities, Texas is also setting an example for states to follow. After the Texas legislature passed a renewable energy requirement, utilities and wind companies invested $1 billion in 2001 to build 912 megawatts of new wind power projects. The results?
According to a report published by the SEED Coalition and Public Citizenís Texas office, “The completed plants created 2,500 quality jobs with a payroll of $75 million, will deliver $13.3 million in tax revenue for schools and counties and pay landowners $2.5 million in royalty income in 2002 alone.
Wind generators under construction at Combine Hills Turbine Ranch, Oregon
Wind generators under construction at Combine Hills Turbine Ranch, Oregon
The multiplier effect of this new investment activity will stimulate another 2,900 indirect jobs in Texas. Wind power is bringing relief to rural Texas and creating jobs statewide.”

Wind power also is providing “a nice kick” to the local economy of Milton-Freewater, Oregon, according to Mayor Lewis Keys. The new 41 megawatt Combine Hills Turbine Ranch wind farm in his district will provide wind power for area residents, who also will benefit from the infusion of construction dollars. “Having been a farmer of wheat, barley and peas for 35 years, it was hard to imagine the surrounding land being used for anything other than farming, but now I can see the diversity of its uses,” Keys said. Leroy Ratzlaff, a third-generation landowner and farmer in Hyde County, South Dakota, agrees. Ratzlaff and his family used a homemade wind generator in the 1930s before rural electrification reached their farm. In 2003, he leased his land to a wind developer that installed seven wind turbines, providing a much-needed economic boost. “Itís not as risky as farming,” Ratzlaff said.

    Because much of the nationís wind energy potential is found in rural areas, wind energy offers an unprecedented opportunity for rural economic development. Wind energy can offer:

U.S. Corn Growers Support Wind Energy

In April of 2003, the American Corn Growers Foundation commissioned a nationwide, random and scientific survey of more than 500 corn farmers in the 14 states representing nearly 90 percent of the nation's corn production. The poll found that 93.3 percent of the nation's corn producers support wind energy; 88.8 percent want farmers, industry and public institutions to promote wind power as an alternative energy source; and 87.5 percent want utility companies to accept electricity from wind turbines in their power mix.

  • Benefits to Rural Landowners
    Rural landowners who lease their land to wind developers typically receive about 2-4 percent of the gross annual turbine revenue — $2,000 to $4,000 for each turbine — which can help compensate for a downturn in commodity prices. The Union of Concerned Scientists estimates that typical farmers or ranchers with good wind resources could increase the economic yield of their land by 30-100 percent. Wind turbines have a small footprint and do not occupy much land, so farming and ranching operations can continue. “Itís almost like renting out my farm and still having it,” Ratzlaff said. “And the cows donít seem to mind a bit.”
  • Increased Local Tax Base
    Wind power projects bring new tax revenue to rural communities. Payments generally range from 1-3 percent of the projectís value. At 1 percent, property tax payments would provide approximately $10,000 for each megawatt for rural communities each year. These revenues can be used to build new schools, roads, bridges, and other infrastructure.
    Here are some examples of states that are increasing their tax revenue because of wind energy projects:
    • Pecos County, Texas, added $4.6 million to its property tax revenue in 2002 alone.
    • In Iowa, 250 megawatts of wind development provide $2 million per year in property tax revenues for local communities.
    • A 20 megawatt wind farm in Kewaunee County, Wisconsin, will result in annual property tax payments of $200,000 to the county, or 50 percent of its annual budget.
    • The development in Hyde County, South Dakota, will result in $250,000 for the county.
  • New Jobs
    Wind power projects create new jobs in rural communities in manufacturing, transportation and construction of projects. Roads must be built. Towers must be erected. Once the projects are complete, jobs are created in the operation and maintenance of the projects. The wind power plant in Lake Benton, Minnesota, is now the second largest employer in town, after the school district. In Iowa, construction provided 200 six-month construction jobs and 40 permanent maintenance and operations jobs at an average wage of $16 per hour. The U.S. wind industry currently contributes to the economies of 46 states. And according to a study by the New York State Energy Research and Development Authority, wind energy produces 27 percent more jobs per kilowatt-hour than coal plants and 66 percent more jobs than natural gas plants.
  • Benefits to the Communities
    Not only do rural communities benefit directly from wind power projects, but they also benefit indirectly. When new jobs and additional farming income are created, the paychecks are spent in local stores and restaurants, boosting the local economy and creating additional jobs. Of course, wind energy offers many benefits beyond rural economic development. Wind energy is ďhomegrownĒ energy that can extend non-renewable energy sources, helping to secure our energy future, reduce energy costs and reduce our dependence on foreign energy. Wind power produces no air or water emissions, which improves the health of our environment. But perhaps the greatest benefit of all is the hope that wind energy projects can offer to rural Americans who wish to remain on their family farms and make a living from them. “We never dreamed this would happen,” Ratzlaff said about the turbines on his land. “Itís going to make for a merry Christmas!”
This article was prepared with information provided by the U.S. Department of Energy, Wind Powering America program.
Learn More about Wind and Economic Development in Your Rural Community
  • Windustry
    This organization partners with the Institute for Agriculture and Trade Policy to promote wind education and outreach. The organizationís Web site at www.windustry.org features a section called Wind Farmers Network of America. If you donít have Internet access, write to Windustry, 2105 First Avenue South, Minneapolis, MN 55404; or call 800-946-3640.


  • Wind Powering America Program
    The Wind Powering America Program is committed to dramatically increasing the use of wind energy in the United States. Visit the Wind Powering America Web site at: http://www.windpoweringamerica.gov/ to find state wind maps, small wind consumer's guides, wind workshops that are going on in your area, and much more.

  • American Wind Energy Association
    AWEA offers a fact sheet entitled ďWind Energy for Your Farm or Rural Land.Ē It is available online at http://www.awea.org/pubs/factsheets/WindyLandownersFS.pdf. You can also access a list of developers at http://web.memberclicks.com/mc/page.do?orgId=awea. Write to The American Wind Energy Association at 122 C Street NW, Suite 380, Washington, DC 20001; or call 202-383-2500.

  • American Corn Growers Foundation corn
    Learn more about the foundationís Wealth
    from the Wind program at http://www.acgf.org/.
    Write to the foundation at P.O. Box 18157,
    Washington, DC 20036; or call 202-835-0330.

  • Wind Energy Resource Atlas
    To find out whether you have a strong wind resource in your area, visit http://rredc.nrel.gov/wind/pubs/atlas/. Information supplied by the U.S. Department of Energyís Wind Powering America aided in the preparation of this article. For more information, please visit http://www.eere.energy.gov/windpoweringamerica.
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