St. Lawrence Mayor Wayde Rowsell has announced his town council has reached a 20-year tax agreement with NeWind Group Inc.
The deal, expected to generate tax revenues in excess of $2 million for the community over the life of the contract, was reached Jan. 19 after a week of negotiations between the two parties.
NeWind was awarded a contract by Newfoundland and Labrador Hydro in November to operate a commercial wind farm near the town, which will produce 27 megawatts (MW) of power to the island.
Mayor Rowsell indicated the town approached the negotiations with the philosophy a good deal would be one mutually beneficial to both the company and the community, an objective he felt was accomplished.
“We’re quite pleased with what we negotiated with the company.”
A key feature of the deal includes a progressive increase in the tax rate at five-year intervals. The town will receive one per cent of gross revenues from the sale of electricity for the first five years, increasing by 0.25 per cent at each interval up to 1.75 per cent in the last five years of the agreement.
The contract also has a re-opener clause once the 20-year term has expired.
Mr. Rowsell acknowledged the estimated minimum the town will receive over the 20-year deal falls somewhere between $2 to $2.5 million.
“It could go up. These are minimums and certainly it could go up. No doubt in that time period I’m sure there’s going to be new technologies whereby they’re going to be generating more electricity.
“The more they generate and the more they sell, certainly the more tax revenue we get.”
The tax revenue portion of the contract won’t kick in until the wind farm becomes operational in 2009.
However, the agreement included a $100,000 development fee to be paid out over two years ““ $45,000 this year and another $55,000 next.
Contained within that fee is a $40,000 contribution, suggested by the company, which will be earmarked for upkeep and maintenance of recreation infrastructure in St. Lawrence, during the project’s development phase.
Mr. Rowsell approved of NeWind’s reputation as a company that strives for visibility in the community.
“Throughout the negotiations, we were quite impressed really with the corporate and community spirit exemplified by the NeWind Group.
“It certainly showcased to us their willingness to be community leaders and team players in strengthening, in particular, the sports heritage of St. Lawrence.”
Meanwhile, Mayor Rowsell noted the company continues to negotiate a contract for construction and fabrication work on the project.
NeWind is said to have narrowed the competition down to two groups, Peter Kiewit and Sons Co. and the Penney Group of Companies.
“I expect you could hear an announcement on the successful bidder very soon.”
The St. Lawrence Wind Project has been in the works for quite some time and the town has had a healthy relationship with NeWind upwards of six years. The mayor indicated he’s looking forward to maintaining the existing spirit of cooperation and partnership between the two parties into the future.
“It’s all falling into place. It took awhile for things to happen, but then again like anything it takes time. It’s something new.”
BY Paul Herridge
The Southern Gazette
|Wind Watch relies entirely
on User Funding