“That’s a $2.5 billion hit.
They call that leakage. I call that a flood.”
– DAN MAZIER
Dan Mazier has a bold vision for the future of the small towns and villages across the windswept Prairies.
He pictures wind turbines above every community that would work night and day to harvest energy from the sky, and funnel the dollars reaped into the pockets of local residents.
Sound far fetched? Mazier, a Justicearea farmer and president of the Elton Energy Co-operative, said all it would take to make that dream a reality is a province-wide, non-profit Community Power Investment Fund (CPIF) that would leverage contributions from local investors into renewable power projects such as wind, biomass, biogas, and solar that could be linked to the existing provincial electrical grid.
When the wind is blowing, the electricity would power local household and industrial needs, with the excess sold to the provincial utility. When it stops, communities would draw their electrical needs from the grid, via a kind of collective net-metering system. The profits would go to lower power bills for residents, returns to investors, and local development projects.
Free up capacity
The proposal would free up more capacity from Manitoba Hydro’s hydroelectric dams to export green power to energy-hungry regions elsewhere, such as the United States, generating additional cash returns to flow back into the province, said Mazier.
The CPIF, which was introduced in 2008 using a model already in use in Ontario and Minnesota, would sell shares for $2,500 each, pool the money together to build wind energy projects, and pay out up to 12 per cent a year.
A guaranteed six per cent annual return would go to the individual investors, with the remaining net operating proceeds going back to communities to support projects of their choosing. Investors could withdraw their funds at any time, he said.
To get started, entrepreneurs would form a Local Community Power Organization (LCPO) and raise seed money, typically beginning with the $70,000 cost of setting up a metering tower to test the local wind resource to ensure viability.
Once past that hurdle, the CPIF would then buy out the local investors, who in return would get one seat on the CPIF’s board of directors in a limited partnership arrangement.
A deal would then be struck with Manitoba Hydro to buy the power generated, and the LCPO could raise equity at the community level which could be used to secure debt financing.
The CPIF, as a collective resources pool, would allow scattered community groups to benefit from centralized legal and accounting expertise, providing a way for them to work together instead of bidding against each other, he said.
Under the conventional model , wind farms are built by outside investors, and apart from easement payments and taxes collected by rural municipalities, all of the profits flow elsewhere. Under the CPIF model, the money would come from the community and stay in the community.
Mazier said that his prime motivation as a proponent for renewable energy comes from its exciting potential for jump-starting economic development in rural areas.
Under the current energy mix, every man, woman and child in Manitoba pays roughly $2,200 per year for the imported petroleum and natural gas needed to keep their homes, farms and businesses humming, he said.
“That’s a $2.5 billion hit. They call that leakage. I call that a flood,” said Mazier, in a presentation at Ag Days 2009. “I don’t know how rural Manitoba can survive under that kind of model.”
Small towns and villages are dying, and young people are forced to seek opportunities elsewhere, largely because of that constant outflow of wealth, he added.
For example, the R. M. of Elton’s 1,285 citizens spend $2.8 million every year on non-renewable types of energy. In Cypress River, with 177 people, the total spent on energy imports amounts to $389,000 per year.
“Those small populations could be energy self-sufficient if we looked at things a little bit differently,” said Mazier.
The concept was partly inspired by Elton Energy’s frustration with Manitoba Hydro’s existing bidding process for wind farm projects, which has been widely criticized as being opaque and too slow for communities eager to develop projects in their areas.
In Mazier’s view, only grassroots pressure on local and provincial politicians can force Manitoba Hydro to change its stance on community-based renewable energy.
“The only way Manitoba Hydro is going to create it is if people ask for it. They said there would never be a wind farm in Manitoba, and now St. Leon is up and running, and doing very well,” he said.
Mazier plans to take the CPIF proposal on the road in community hall meetings this spring, and hopes to drum up interest in the creation of LCPOs which would work with the larger CPIF.
“This is a community-driven thing. If your community doesn’t step up and take part, it’s not going to happen. So you’ve got to get your act together and say you want it,” said Mazier.