The wind game is pay to play.
Rural counties are enticing companies to invest millions of dollars to build wind farms with tax abatements.
“We gave probably the most aggressive incentive package offered, but we thought it was important,” Oldham County Judge Don Allred said. “For 10 years, there is a 100 percent tax abatement, but there will be payment, in lieu of taxes, of $100,000 a year.”
The Edison Mission Group, working with Cielo Wind Energy, is putting up to 160 megawatts of wind power online.
“Originally, they were going to put 80 (megawatts) in Oldham and 80 in Potter County,” Allred said. “But we said if they put all of it in Oldham County, they could pay the $100,000 (and no taxes).
“To some that’s not much money, but that is a 10 percent increase in our tax revenue for an estimated investment of $250 million.”
Before construction began, Potter County started negotiating an abatement of 100 percent of taxes for 10 years. There would have been a payment of $1,000 per megawatt produced up to $20,000 per year.
“We got one ready to go but didn’t finalize it,” said Dave Kemp, assistant Potter County attorney.
Besides having valuable property to tax after the 10-year abatement, Oldham County got other benefits. Any cost of maintaining roads during construction are to be paid by Edison Mission, and any materials that could be purchased from businesses in the county, such as sand, gravel or hardware, were to be bought locally, Allred said.
Schools can also help wind companies. After taxing projects at full value for two years, Wildorado and Vega school districts will cap the value at $10 million. Mission Edison will then share its tax savings from the artificially low valuation with the schools, said Wildorado Superintendent Matt Branstine.
One of the earliest Panhandle players in wind energy was Carson County with the White Deer Wind Farm now operated by Shell. The county granted a seven-year, 100 percent tax abatement for that project.
There are now two other abatements outstanding, one for an inactive project near Conway and a proposed 10 megawatt farm near Pantex to be built by Majestic Wind Power, said Carson County Judge Lewis Powers. The Majestic abatement is for 87.5 percent for 10 years, equivalent to the 100 percent for seven years granted to the White Deer project.
“We wanted to be fair and equitable but have some income early on,” Powers said.
High Plains Wind Power is putting together wind leases south of White Deer to near Panhandle but has not yet asked for an abatement, Powers said.
Nearby, CPV Wind Ventures, a Maryland company that is being purchased by Spain’s Iberdrola Renewable Energies, is planning to erect almost 60 wind turbines in Gray and Donley counties. Officials expect the total investment to be about $125 million.
“We have approved abatements. We’re simply waiting to hear back from them,” said Gray County Judge Richard Peet. “They’re having their attorneys look at it. They’ve already tentatively agreed.”
The abatement would exempt 90 percent of property value in the first four years and 60 percent for the last six years.
Donley County is in negotiations with CPV for an abatement covering the turbines to go in its territory.
“We hope to have something within a month,” said Jack Hall, Donley County attorney.
Hansford County has four wind farms built by investors who partnered with John Deere Credit. Three small farms, capable of producing 10 megawatts each, are covered by a seven-year tax abatement that starts at 95 percent exempt and decreases to 60 percent, said Hansford County Judge Benny Wilson. The fourth farm, rated at 80 megawatts, is under construction and is covered by the same tax terms.
“We have the possibility for a 240 megawatt project,” Wilson said. “They’re trying to finish the paperwork.”
Hansford County is offering the same abatement agreement that covers the first four wind farms.
Another proposed farm to be built by Chermac Energy would cover land in Randall, Deaf Smith and Castro counties.
“We’re looking around the state to see what’s fair,” said Randall County Judge Ernie Houdashell concerning abatements.
“We’re getting close to doing something, but there’s not anything concrete.”
Deaf Smith County Judge Tom Simons expects Chermac to request an abatement, but has been talking to other companies, as well.
“We’ve had a number of inquiries from a variety of companies about opportunities,” he said.
“It’s going to be a big deal. Why not use this resource? The wind’s going to blow anyway.”
A number of companies have expressed interest in building facilities in Briscoe County, but there have been no requests for tax relief.
“We have not got to that stage yet,” said Briscoe County Judge Wayne Nance. “They should be coming soon, but they haven’t approached us yet.”
Childress County is also anticipating the issue as WindRose Power develops plans for a wind farm.
“We’re expecting that next month,” said Childress County Judge Jay Mayden.
By Kevin Welch
15 April 2007
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