The 9-megawatt (MW) PáTu wind project is a small, community-owned wind farm nestled among 850 MW of wind power behemoths: the Klondike and Biglow Canyon wind farms in Sherman County, Ore. The wind farm, which consists of six GE 1.5-megawatt (MW) turbines, was developed by Ormand and Jeff Hilderbrand on land their family has been farming for more than a century. The project is the first community-owned wind farm in Oregon, and one of only two on the entire West Coast.

PáTu began producing power in December 2010 and recently signed two long-term agreements to sell its renewable energy credits (RECs) to Seattle-based REC marketer OneEnergy Renewables (OER) and Seattle City Light, Seattle’s municipal utility. The agreements are the first of their kind in the region and will hopefully serve as a model for future community wind development.

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image via PaTu Wind Farm

RECs are the “environmental attributes” of renewable energy generation. Separate from the actual megawatt-hours (MWh) produced, an REC represents the tangible but otherwise not marketable benefits of one megawatt-hour of renewable energy – the carbon not emitted, the mountaintop not removed, the oil not spilled, etc. Creating a market for RECs evens the playing field for clean energy in a market dominated by dirty energy sources. For many projects, securing an REC contract can mean the difference between financial viability and bankruptcy.

According to OneEnergy Renewables CEO Bryce Smith, negotiating a 20-year REC contract for a small local project like PáTu presented unique challenges and opportunities. “It’s nice for people in the Northwest to be able to drive and see the projects their RECs are coming from,” Smith said. “But, PáTu is a 9-MW project, which is small. The smallest wind technologies are getting better; but it’s still hard to make them pencil, when you have customers who care not just about where the RECs come from, but the economic feasibility as well. A lot of utility customers are interested in supporting local projects as best they can, but that is hard to do in the current REC market.”

The key to making local projects like PáTu work is collaboration. In this case, PáTu worked with a brokerage firm Karbone to negotiate a contract that enables the wind farm to sell RECs to OER until 2015. In 2016, Seattle City Light will begin purchasing the facility’s RECs to comply with Washington’s renewable portfolio standard. “You have to get very creative in order to make these projects work,” Smith said. “It takes cooperation and you have to be willing to build relationships with lots of folks.  As a developer, we understand what it’s like to be in PáTu’s shoes and to have to sell the RECs for 20 years to get the project financed. We can help smaller developers, like the Hilderbrand family, get these projects done. And, from a practical perspective, these sizes of projects can work nicely in small communities.”

As former Director of Bonneville Environmental Foundation’s (BEF) Project Development Group, Smith developed more than 160 small-scale renewable energy projects in 16 states. Under his direction, the program earned the 2009 Innovation Award from the Interstate Renewable Energy Council and the 2009 Best Green Power Education Outreach Program awarded by U.S. Department of Energy, EPA, and the Center for Resource Solutions.

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image via OneEnergy Renewables

The OER founders have made a commitment to stay true to BEF’s model of providing renewable energy educational opportunities. The company’s Energy Scholars program mentors university students interested in a career in renewable energy. As a Certified B Corporation, OER is also dedicated to “using the power of business to solve social and environmental problems.” Essentially, this means that all of the funds from OER’s REC sales go toward working directly with landowners to develop new projects from the ground up. “Our REC customers are not only supporting projects directly, but supporting the future of the industry by recycling it into brand new projects,” Smith said.

But Smith and OER Co-Founder and President Bill Eddie (former director of Origination and Procurement at BEF) saw an opportunity to develop much larger projects, with more impact from a production standpoint. The company currently has about 15 projects under development, including 300 MW of solar power in eight states. “People will be surprised with how quickly solar is becoming viable,” Smith said. “The reduction in capital costs is dramatic and solar can be cost-competitive in certain situations. We are trying to make solar a really legitimate part of the power generation mix.”

This goes for the Northwest as well, where winter days are short and the weather is notoriously cloudy. “We know that solar works here,” Smith said. “If it works in Germany, it can work in the northwest – especially east of the mountains. Hopefully, the momentum around community solar and individuals installing solar on their homes will carry it forward in the Northwest and make it more feasible to do large-scale projects.”