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Wind firm backed by Golisano shuts after prices fall

Empire State Wind Energy LLC, the company backed by billionaire and Paychex Inc. founder Thomas Golisano, has ceased operations because its leaders believe the venture will not be profitable.

David Still, a partner and investor in Empire State Wind Energy, said this week the company is "mothballing," or postponing, the project indefinitely. The main reason is the significant drop in wholesale electricity prices.

"The company is not proceeding with anything at this point," Still said, adding the chances of resuming down the road do not look good either. "If we do see a resurgence in wholesale prices, we could proceed with the project, but economically, it just doesn't work for us now."

The Oneida-based firm has been looking to develop wind farms in the area since it began in 2006. The company has said it would build only projects acceptable to host communities and return most of its profits through taxes, payments in lieu of taxes and fixed-cost energy sales.

The New York Independent System Operator this year reported the state's average wholesale electric energy price for 2009 was the lowest in 10 years.

NYISO operates New York's bulk electricity grid and administers the state's wholesale electricity markets.

The average annual price of wholesale electric energy in the state was $48.63 a megawatt-hour in 2009. The average was below the previous low of $49.90 a MWH set in 2002 and 49 percent below the 2008 average of $95.31, NYISO reported.

The declining wholesale electricity energy prices in 2009 were largely attributable to reduced power consumption and reductions in the cost of natural gas, NYISO said.

Click here to read Andrea Deckert's whole article.

Labels: Disadvantages, Money