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Pioneer ventures taking shape in Milan and Kandiyohi County: Milan SEU

MILAN -- West central Minnesota could soon be home to two ventures to promote renewable energy and conservation.

Customers could own or lease photovoltaic panels in a solar farm that would provide electricity for the Kandiyohi Power Cooperative and Willmar Municipal Utilities. One of the nation's first rural sustainable energy utilities could help residents in the Milan area with everything from adding highly efficient, geothermal heating and cooling systems to sealing up drafty, older homes.

Milan recently created Sustainable Energy Utility. Its temporary coordinator, Erik Thompson, told participants at a recent West Central Clean Energy Resource Team event in Milan that the purpose is to promote on-site, renewable energy projects through education and by helping with financing for smaller-scale improvements.

The Greater Milan Initiative -- a citizens group which acquired the former Milan School to preserve its use for the community -- is leading this new venture. The utility could prove especially beneficial to low-income residents, who often lack the resources to replace older, inefficient appliances, or make energy-saving improvements to their homes, according to Thompson.

He said the utility will use a "shared saving model'' to help finance improvements.

For example, if a project to weatherize a home can save $40 a month in energy costs, no-interest financing would be structured for payments of $20 a month. Each party would realize one-half of the saving benefits, Thompson explained.

Also, the utility is already at work informing people about existing conservation incentives -- everything from tax deductions offered by the federal government to programs available through power utilities -- to encourage more conservation. Thompson said the utility hopes to create its own program to work alongside the "cash for clunker appliance'' program that the federal government is planning to offer.

The Sustainable Energy Utility could benefit the town's population of people from Micronesia. They represent more than 90 of the town's 300 residents. The new arrivals to the country hold lower paying jobs and their homes and appliances are older and less energy efficient, he noted.

One of the state's first photovoltaic solar farms could be generating electricity for the customers and member-owners of the Kandiyohi Power Cooperative and Willmar Municipal Utilities.

The idea is being modeled after a solar farm already serving the member owners of the United Power Cooperative in Brighton, Colo., according to Dave George, CEO, and Dan Tepfer, energy management specialist, with Kandiyohi Power.

For $1,050, co-op customers in Brighton can take a 25-year lease on a photovoltaic panel maintained by the cooperative. The customer receives a monthly credit of $3 to $4 in return for the power the panel provides the cooperative's distribution system.

George and Tepfer said the Colorado solar farm provides only a small portion of the utility's overall power needs, but it has many benefits. For starters, it helps overcome the criticism that rural cooperatives are slow to embrace the local economic benefits that renewable energy systems can offer, noted Tepfer.

Taking advantage of local, renewable energy sources also keeps energy dollars at home, a very important benefit but one that is difficult to measure, said Tepfer.

But perhaps most important of all, the pilot project in Colorado has created lots of "energy nerds'' within the cooperative's membership. Those holding leases on solar panels have become very attuned to their own home energy uses and have become very effective at reducing their energy uses.

The ability to improve efficiency and conservation is becoming increasingly important to the cooperative, said George. Even during the recession, the cooperative has seen a slowed but steady rise in energy usage. Yet legislation requires that utilities across Minnesota begin to reduce the amount of electricity they sell by 1.5 percent a year beginning in 2010.

The solar farm could be an important step in meeting that mandate by promoting energy awareness and conservation by members, said George.

Currently the cooperative buys all of its electric power from Great River Energy. Like the Colorado farm, the solar farm proposed here would only offset a small amount of power, the two said.

The venture is still in the early planning stages. The technical issues of how to develop a solar farm and add power to the distribution systems of the two local utilities are being worked out, but they are not the main challenges, according to George and Tepfer.

The difficult issues are financing and how to assure that participating customers reap the benefits of tax and other incentives offered for renewable energy, they said.