Jan. 30, 2003

SD governor introduces legislation that supports wind development

Pierre, S.D. - South Dakota Gov. Mike Rounds announced today that he is introducing legislation designed to help clear the way for development of a 40-megwatt wind farm near Highmore, S.D.

At a press conference here, Gov. Rounds said the legislation imposes a tax on wind generation facilities based on its property value in the county. "It changes the way we tax wind energy," he said. "It takes it (wind energy facilities) out of the centrally-assessed state tax and puts it in the locally-assessed tax base." Gov. Rounds said the legislation will be introduced tomorrow to the South Dakota legislature.

The effect of this legislation would lower the amount of the tax assessment for wind projects by about 70 percent. Gov. Rounds said the wind facilities will be taxed like any other structure or building that's constructed in the county. "The assessment is for the foundations and structures, but does not include the generator and the turbine blades," he said.

The Highmore project is half of an 80-megawatt (MW) wind farm planned by FPL Energy, Juno Beach, Fla. The other half will be constructed in southeast North Dakota near Edgeley. The output from the proposed wind farms will be sold to Basin Electric Power Cooperative, Bismarck, and its member systems.

Although he could not attend the press conference, comments from Michael O'Sullivan, Senior Vice President of Business Development for FPL Energy, were made available. He said his company is delighted that Gov. Rounds will be introducing a bill that will help to further the growth of wind energy in South Dakota. "This legislation makes it possible for us to continue to move forward with the South Dakota Energy Center we have proposed for Hyde County. We hope to break ground late in the spring," he said.

Ron Harper, CEO and general manager of Basin Electric, expressed his appreciation to Gov. Rounds for taking the initiative and being proactive to help get this project built. "This is one of the many steps that must be completed to get this project moving for South Dakota's electric cooperatives. We're confident that passage of the bill will help make the wind project near Highmore possible. It's a very important step that needed to be completed."

Basin Electric and FPL Energy announced an agreement for the wind projects last fall, which will be constructed, owned and operated by FPL Energy. Both projects are scheduled to be operational by the end of 2003. However, completion of the South Dakota project is based in a large part on passage of the legislation introduced today by Gov. Rounds. These two wind farms will produce enough electricity to serve about 25,000 typical North Dakota or South Dakota homes.

The North Dakota project will be in the service territory of Basin Electric's Class A member-owner Central Power Electric Cooperative, Minot, N.D., and its member Dakota Valley Electric, Milnor, N.D.

The North Dakota portion of the project will include constructing 11 miles of transmission line to connect the wind farm to an existing substation. Gary Williamson, general manager of Central Power, said the line will have a capacity of 115,000 volts and will be built by Central Power.

The South Dakota project is planned about 10 miles south of Highmore in the service territory of another of Basin Electric's Class A member-owners, East River Electric Power Cooperative, Madison, S.D., and its member Dakota Energy Cooperative, Huron, S.D. Basin Electric and East River have also jointly developed another 2.6-megawatt wind farm near Chamberlain. It became operational in January 2002.

FPL Energy is the nation's leader in wind energy development and generation. It has 28 wind generation facilities in operation in 10 states, with additional wind farms in advanced development in three additional states (including North Dakota and South Dakota). It is a subsidiary of FPL Group, Inc. (NYSE: FPL), one of the country's leading providers of electricity-related services.

Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck. It generates and transmits electricity to 124 member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming. These member systems distribute electricity to about 1.7 million consumers.