Neal St. Anthony: 'Wind is the future'

Oil man Bobby Williams is hedging his bets with a stake in the burgeoning wind-energy business. Williams, 70, is no Oklahoma wildcatter. He is the majority owner of eight Bobby & Steve's Auto World stations around the Twin Cities, the multilevel retail emporiums that sell everything from feel to lube jobs to lunch. Yet, through what could prove to be shrewd investments in a near-dormant Minnesota public company, Williams and his partners have built a stake in a company they have renamed Wind Energy America Inc. (ticker: WNEA). Williams, a major shareholder, is chairman. The Eden Prairie company, so far with only one full-time employee, has a market value of about $28 million but virtually no revenue yet. However, through deals it has closed or is negotiating, Wind Energy investors are betting that it will be a profitable growth company within a few years.

"Wind is hot and it's free," Williams said over a bowl of chowder at his Metrodome-neighborhood station last week. "The turbines are expensive, but there's no waste. It's clean. It just needs to be harnessed."

Williams, a farmer's son from Mora, Minn., started pumping gas on Lake Street in 1954. By 1963 he owned his first station. The energetic entrepreneur remembers the water-pumping windmill on his powerless family farm in the early 1940s.

"Wind is the future," he said. "And we're trying to raise money right now."

Williams, who owns nearly 5 percent of Wind Energy, bought about half of his 718,000 shares for 40 cents and 60 cents per share in 2006 -- about a third of today's price of $1.80 per share.

Last month, Wind Energy announced a letter of intent to buy Vadnais Heights-based Boreal Energy, a larger private wind farm developer that has about 60 megawatts' worth of projects planned in Minnesota, North Dakota, Iowa and Canada.

The no-cash deal would increase Wind Energy's fledgling stake in the wind business and make it easier for the consolidated, public company to raise additional capital through private placements of stocks, according to Wind Energy CEO Robert Knutson, 70, a securities lawyer who has experience in the energy industry, and Darrel Kluge, a broker at Feltl and Co. and an investor in Wind Energy who recruited Williams and other investors to the company.

"If we do this deal, there's no question that Boreal would have [majority] control of the company," Knutson said. "But it could be a fantastic deal for us. And I think we have the ability to raise the millions of dollars we need."

A circuitous path

Boreal unsuccessfully tried to raise $60 million last summer in the United Kingdom. The company was co-founded in 2004 by William Poppert, a veteran energy-management executive, and Greg Jaunich, a shareholder and consultant to Boreal.

Jaunich, a 15-year pioneer of the Minnesota wind energy industry, is facing federal criminal charges that his Northern Alternative Energy overbilled Xcel Energy Inc. and the Minnesota Department of Commerce for thousands of dollars worth of electricity and energy-production credits between 2003 and 2005 from several wind turbines that Jaunich controlled in southwestern Minnesota.

The criminal charges do not involve Boreal. Jaunich is scheduled to respond to the charges in court Nov. 26.

Poppert said that Boreal was able to get commitments for half its goal of a $60 million public offering on the London Stock Exchange in August. Then the market was rocked by the subprime mortgage blow-up and ensuing credit crunch.

Boreal withdrew its offering in the United Kingdom and entered into negotiations to merge into publicly held Wind Energy. The aborted public offering was unrelated to Jaunich's indictment, which was handed down in September, Poppert said.

Boreal, a small company of engineers and financiers, needs to raise capital to fund its portion of future developments and attract big partners in a consolidating industry that the American Wind Energy Association expects to grow by 4,000 megawatts this year, a third more than in 2006. And Minnesota and Iowa are two of the five biggest wind-producing states.

"A [combined] Wind Energy America and Boreal will represent a pure play for wind investors in middle America," Poppert said.

Wind Energy booked no revenue in the fiscal year that ended June 30, as it repositioned itself, spun off an unrelated business to shareholders and invested in wind, according to an October filing with the U.S. Securities and Exchange Commission.

It made its first $200,000 investment last winter, in a 3 percent stake in Averill Wind, a company formed to develop a 10-megawatt wind farm near Moorhead, Minn. Wind Energy also invested $2.3 million in August to buy Northern Alternative Energy's stake in a 33-turbine installation at two sites in Lincoln County. Wind Energy also has $11.7 million in past losses from a predecessor company that it can carry forward to offset future income taxes.

The roots of Wind Energy are in Dotronix Inc., founded in 1980 by William Sadler, a pioneering TV engineer. He formed Dotronix to design and market cathode-ray tubes, displays and digital technology.

Sadler died unexpectedly in June 2003, and the money-losing company ceased operations in 2005. The stock was worth pennies. After settling debts and estate-related issues, Dotronix emerged as a "shell," an orphaned public company without operations that traded over the counter.

After flirting with a bioscience acquisition in 2006, the major investors began scouting wind farms. The booming wind industry is fueled by alternative-energy mandates from state governments, contracts with big utilities and government incentives.

By April, Dotronix spun off the bioscience company -- PuraMed -- to shareholders as an independent company. Then Dotronix changed its name to Wind Energy America.

And that's how oil man Bobby Williams became chairman of a budding alternative-energy company.

"Look at British Petroleum," Williams cited as precedent for his foray into alternative energy. "The 'BP' now stands for 'Beyond Petroleum.'"

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com