Clean Renewable Energy Bonds Used to Fund Wind Turbines at the University of Minnesota-Morris
The University of Minnesota-Morris received funding for three projects in 2007 from the Clean Renewable Energy Bonds (CREBs) program managed by the Internal Revenue Service. First created under the federal Energy Tax Incentive Act of 2005, the CREBs program allows electric cooperatives and government entities to issue tax-free bonds to finance renewable energy projects at 0 percent interest. The Energy Extension and Improvement Act of 2008, passed on October 3, authorized $800 million for new CREBs to be issued through December 31, 2009; one-third of this amount is ear-marked for state, local, and Indian tribal governments, including public colleges and universities. This program is perhaps the best option schools have to obtain funding for renewable energy installations on campus, although many financing opportunities are also available at the state level.
The three projects at UMM include a 1.65 MW wind turbine on campus to join the wind turbine that currently provides more than 50 percent of the University's electricity needs, a 1.65 MW wind turbine in Western Minnesota that will be owned jointly with the Mille Lacs Band of Ojibwe, and a steam turbine powered by the school's new biomass facility. UMM first sought CREBs funding in 2006 when they applied for $3.3 million to fund the school's second wind turbine. According to Lowell Rasmussen, Vice Chancellor of Finance and Facilities at UMM, they learned a valuable lesson in the process: the IRS awards funding first to the smallest projects, and that year the IRS ran out of funding for projects costing $3.2 million. In 2007 UMM applied for $1.8 million in CREBs - half the cost of the new turbine - with the University agreeing to issue bonds for the remaining half. For the project with the Mille Lacs Band, both parties applied for $1.8 million in CREBs for a project at the same physical location (a requirement of the application process), and both parties received funding, covering the full project cost. Power from the wind turbine will be sold into the electrical grid and UMM will use its share of the revenues to fund green programs on campus. UMM also received $1.5 million in CREBs in 2007 for its steam turbine project.
This year, UMM received the first-ever Campus Excellence Award for the use of renewable energy from the American Council on Renewable Energy (ACORE). ACORE's Higher Education Committee includes representatives from 54 institutions and has three key objectives: greening the campus through the use of renewable energy; promoting renewable energy-focused curriculum and educational resources; and developing funding opportunities for renewable energy. Colleges and universities represent five percent of the U.S.'s total electricity consumption, and Cheri Olf, ACORE's Director of Education and International Workforce Development, hopes to expand the number of institutions participating in the Committee. Beyond offering members the opportunity to collaborate with fellow institutions, ACORE provides insight into policy, markets, and financing for renewable energy and can help members identify funding sources. These include, in addition to CREBs, Department of Energy funding for biomass to biofuels research, state energy offices' incentive programs, utility rebates, Renewable Energy Credits, and 3rd party developers who bear the project installation costs in return for long-term contracts to sell the energy generated back to the institution.
