Eyebrows in the energy industry rose last month when retired Gen. Wesley Clark, a former commander of NATO forces in Europe and a one-time Democratic presidential candidate, joined the board of little Juhl Wind of Woodstock, Minn.

Juhl, founded by 35-year Minnesota wind pioneer Dan Juhl, went public last year, boasts a very modest market value of $40 million and is expected to achieve revenue this year approaching $12 million from developing and operating small wind farms in the Midwest in partnership with farmers and other community-based owners.

Juhl, Clark and Juhl President John Mitola, an engineer, lawyer and veteran utility executive, have spent a lot of time figuring out how they can keep the wind energy from becoming just the province of huge energy players such as utilities and energy conglomerates.

"Dan, on his own and without any silk-stocking investment bankers, managed to get about $200 million in wind farms going that are owned by farmers and other community members," Mitola said this week. "We've got [hundreds of millions more] in the pipeline. But we need capital."

Although the details won't be released in an investor prospectus before spring, Juhl is working with Northland Securities of Minneapolis on the first $100 million offering, or fund, that might function like an asset-pooled Real Estate Investment Trust. It would let individuals, communities, socially responsible investment funds and others invest in a Juhl portfolio of small-to-large wind farms.

The wind-energy boom has been seeded by federal and state tax credits that generally are most beneficial for wealthy investors, partnerships and corporations who might have unrelated income to offset. The federal stimulus bill appears to allow the tax benefits to be claimed by such a taxable pool, increasing profits and dividends to a lot of smaller owners, said Lee Schafer, director of investment banking at Northland.

A ready source of capital

That would give Juhl Wind, based outside Pipestone in the gusty southwest of Minnesota, and other small developers access to a ready source of capital to develop small projects close to existing transmission facilities, whether in towns, college campuses or farms.

Dan Juhl is well known in wind-finance circles for inventing the "Minnesota flip." In order to fully take advantage of state tax incentives surrounding wind, the owner needs substantial income against which to take tax credits tied to wind production. Under the flip, a large owner enters into a partnership with a small, minority owner for several years, until the tax benefits are largely exhausted. Then majority ownership flips over to the small local owners. But that model has limits and must match individual investors with each project.

Mitola, who plans to move his family to the Twin Cities from Chicago, predicts the first $100 million fund will put Minnesota in the vanguard of an innovative and repeatable financing scheme for an emerging industry that largely has been the province of venture capitalists and big energy companies.

Wind, seeded by federal subsidies, is the fastest-growing alternative energy in America. And many states have adopted renewable-energy mandates that call for up to a third of their energy to come from alternative sources by 2025.

Clark, who has worked as a consultant and investment banker since retiring from the Army in 2000, preaches that America's economic and security interests lie in secure, domestic energy supplies and a transportation fleet fueled increasingly by electricity and other alternatives to oil.

The high-profile Clark, who could have his choice of high-paying board seats at Fortune 500 companies, contacted Juhl Wind about opportunities last year because of his commitment to community-based energy projects. Clark, 64, a son of the working class, went on to be valedictorian of his West Point class and a highly decorated soldier.

Clark, Juhl and Mitola have concluded Juhl Wind could be a model of next-generation independent ownership of domestic energy projects.

Juhl, 58, was an electronics technician in the Navy. He drives an electric-powered pickup truck that he converted himself. He owns about 70 percent of the company.

About $1 billion worth of wind projects have been developed in southwestern Minnesota, which ranks among the top four wind-generating states, according to the American Wind Energy Association.

A recent study by the University of Minnesota has concluded that the economic benefits to a community double when the wind farm is owned locally, compared with when the farmer is paid for leasing the land on which turbines sit but most of the revenue and profit flow to outside owners.

In a recent report, Joseph Noel of Emerging Growth Research in San Francisco, has called Juhl Wind a key player in "one of the fastest growing subsectors of renewable energy."

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