Donley County Commissioners approved a ten-year tax abatement agreement for a $90 million wind farm project on the Trew Ranch during their regular meeting Monday.
Dale Cummings, a tax attorney who represents wind farm developer Iberdrola, said the agreement means good things for both parties.
“I think it’s a good deal for us and for the county,” Cummings said. “Hopefully it opens the door to a lot of wind power developments in Donley County.”
The Trew Ranch project, which includes 57 turbines generating 85.5 megawatts in Donley and Gray counties, was originally developed by Maryland-based Competitive Power Ventures. Earlier this year, CPV sold its wind portfolio to Iberdrola, a European firm that says it is the largest wind development company in the world. The entire project is expected to cost $125 million, but the portion in Donley County is estimated at $90 million.
The terms of the abatement are dependent on where the power from the wind farm is ultimately sold, giving the company more incentives if the power goes into the less lucrative SPP or Southwest Power Pool grid and less incentives if the power goes in the more competitive ERCOT grid that services much of East Texas.
If the power is sold in the SPP, Iberdrola would receive an abatement as follows: 90 percent for years one and two, 80 percent in year three, 70 percent in year four, and 60 percent in years five through ten. But if the power is sold into ERCOT, the company’s abatement would be 60 percent in years one through five and 40 percent in years six through ten.
The Trew Ranch project was designed with existing transmission lines tied to the SPP in mind, Cummings said. But if efforts are successful to build a new transmission line through Donley County and the Texas Panhandle that would link this area’s wind generation to the ERCOT market, then the local farm could take advantage of that.
“If something happens, the terms of the agreement are geared so that if the company gets a better deal, Donley County gets a better deal,” Cummings said.
Judge Jack Hall said the commissioners’ court was happy to get the abatement signed and that he hoped the project would get started soon.
Cummings said he did not know when work would begin on the Trew Ranch wind farm but that it would be sometime next year.
“It’s been delayed because of the change in developers,” he said, noting that the tax incentive is just one piece of a puzzle that includes construction, transmission connection agreements, power purchase agreements, and other details.
Hall said Sweetwater attorney Alan Carmichael represented the county in negotiations on the abatement. The deal is similar to what other counties have done, and Carmichael is well known for his work regarding wind farms, Hall said.
Cummings was scheduled to meet with Clarendon ISD Trustees Monday night to discuss school tax incentives. The company will also be seeking agreements with the Clarendon College District and the Donley County Hospital District.
By Roger Estlack
16 August 2007
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