Company presents wind energy plan for the CNMI

The world is looking at an energy price tsunami, with oil projected to reach $200 per barrel in the near future, a president of a wind energy company told a group of lawmakers yesterday, as he explained the benefits of alternative energy for the CNMI.

David van Over, president and CEO of Synergy Power Corp., answered questions posed by senators and representatives during the hour-long presentation yesterday in the House chamber.

Van Over has proposed embarking on a power purchase agreement between the CNMI government, the Commonwealth Utilities Corp. and Eyas Power Fund, LLC. Eyas Power would produce and supply the energy using Synergy and other renewable energy equipment to CUC.

With the agreement, consumers would not be forced to withstand the rise and fall of power rates based on the price of oil. Instead, van Over said, rates would be fixed for the next 20 years. According to the agreement he prepared, the price per kilowatt-hour would be 30 cents not including taxes or tariffs. Eyas would be responsible for acquiring the financing for installation of generation and storage equipment.

In a small community like the CNMI, reliability and costs are the key factors, House Speaker Arnold Palacios said. He questioned whether 30 cents, plus the additional four to five cents added on for distribution and administrative costs would be cost-effective.

Costs are not fixed and could vary based on factors, van Over said.

“If you came back to me and said you can only pay 25 cents, I wouldn’t say yes, and I wouldn’t say no. I’d go back to the drawing board,” he said.

Van Over proposed Synergy’s largest wind turbine for the CNMI because it would be the most cost-effective, he said. The largest generator reaches 140 feet at the hub and has a diameter of 90 feet. The blades rotate 360 degrees. The output rate per turbine would be 1,000 kilowatts. Ten turbines would equal one megawatt.

Senate President Pete Reyes questioned whether it was feasible to install the necessary number of turbines to meet Saipan’s peak demand of 40 megawatts a day.

“It seems to me like you’d need a huge amount of land mass,” Reyes said.

Van Over said there is another way to go about it.

“The government could tell us what is the area, and we could tell you how many turbines could fit into that,” he added. Under the agreement, the government and CUC must lease the land for the turbines to Eyas free of charge.

Rep. Francisco Dela Cruz proposed an agreement where the product was tested on a small scale on island.

“The reason why I propose that, I guess everyone understands the economic situation. A lot of times we’re hesitant of a PPA [power purchase agreement],” he said, adding that installing five megawatts on Rota might be a good place to start in order for people “to feel, see and touch the product.”

“I don’t think the community is ready for big scale alternative energy at this time,” the representative said.

Van Over said he imagines his company would be willing to look into that.

Synergy is also proposing operating an assembly and tower manufacturing plant, which would produce Synergy wind turbines for projects in the Commonwealth and regional export markets. Annual orders are expected to exceed $10 million, according to Synergy’s proposal. Synergy estimated it could create 50 jobs within three years.

A non-profit company, Synergy Sustainability Institute, would also be set up for professors and students in certain CNMI institutions.

Van Over, who sent the proposal to Gov. Benigno Fitial and CUC executive director Antonio Muna, said he has not heard back but is interested in meeting with the officials.

Charles Reyes, press secretary for the governor’s office, said Fitial is a supporter of alternative energy like wind turbines. The governor receives many unsolicited proposals, Reyes said, and it can be difficult to determine which company is best but remains open to all proposals.

CUC was unable to meet the requirements of Public Law 15-87, which stated that 10 percent of CUC’s power must come from renewable energy source by the end of 2008. By Feb. 1 CUC must explain why it was unable to meet that requirement.

Under PL 15-87, the renewable energy portfolio standard will double every two years until it reaches 80 percent by 2014.