Texas: Billionaire Seeks Tax-Exemption 

LUBBOCK, Texas – Myriad obstacles remain for billionaire oil tycoon T. Boone Pickens to market Panhandle water to thirsty cities elsewhere in Texas but one intermediate hurdle appears to be a slam dunk.

Pickens still must lay a pipeline to deliver water to a buyer that’s yet to be secured.

But this week Pickens secured a November election for a proposed fresh water supply district in Roberts County. Only five people will be eligible to vote and all either work for him, support him and live within the proposed district’s boundaries.

The district could issue low-interest bonds to build a 320-mile pipeline for the water. He also wants to use the rights of way for the water line to bury transmission lines from his proposed 4,000 megawatt wind farm, which would be the largest in the world.

The move is the latest in what has been a five-year effort by Pickens’ Mesa Water to ship water from the Ogallala Aquifer in the Panhandle to cities trying to plan for future growth.

“We continue to have discussions with potential (water) buyers, and want to have as many options as possible to address what we believe will be increasingly critical water supply issues and power issues in Texas, part in the Dallas-Fort Worth area,” said Mesa spokesman Jay Rosser.

Though Roberts County Judge Vernon H. Cook voted Tuesday to approve a petition for the district and to call for the election to confirm it, he questioned the method.

“I feel like it’s an abuse of the system,” he said of only Pickens’ people casting ballots. “I have all kinds of concerns about the way the legislation is structured, but I don’t think we have a real legal recourse on it.”

Wednesday was the deadline for any of Texas’ 254 counties to order an election for Nov. 6.

Cook said he sees potential for economic development for Roberts County: jobs and payments Pickens’ Mesa Power would pay landowners for acreage wind turbines would set on.

Cook called the election’s outcome “a foregone conclusion.” He said deeds for the acreage Pickens gave four of his employees were recorded with the county Tuesday, though he wasn’t certain when Pickens gave them the land.

One of those employees, Mike Boswell, said Pickens handed over the deeds about two months ago and with the understanding that the new landowners would back the district.

Monty Humble, an attorney working for Pickens, said freshwater supply districts can get low-interest bonds for infrastructure beyond the boundaries of the district if they are revenue bonds.

The district also comes with eminent domain powers that reach beyond its boundaries.

“There’s nothing remarkable about using eminent domain for water projects,” he said. “And there’s nothing remarkable to using it for electrical transmission.”

The state has 55 fresh water districts, according to an official at the Texas Commission on Environmental Quality.

Officials in Kaufman County in North Texas on Tuesday put off approving a similar election because of a possible flaw in the petition seeking it.

Rosser said the Kaufman County decision is “a minor, although temporary, setback” to advance the project.

The company disagreed there was a flaw in the petition, but will review its application and resubmit it for a May election, said Boswell, who also has land on which he plans to develop high-end homes in Kaufman County.

Mesa officials want the Kaufman County water district to deal with any snags the could come up, said Rosser, who did not return a call from The Associated Press on Wednesday.

C.E. Williams, general manager of the Panhandle Groundwater Conservation District that places restrictions on how much water is pumped from parts of the Ogallala, said the fresh water district does not usurp his group’s limits.

Pickens started Mesa Water several years ago to buy water rights beneath four Panhandle counties. More recently, he started Mesa Power LP to build wind turbines on as many as 200,000 acres in Roberts, Gray, Hemphill and Wheeler counties.

The farm would have as many as 2,000 wind turbines, and some would be large enough to generate 2.5 megawatts each. One megawatt is enough to power 250 homes in Texas.

By Betsy Blainey

Associated Press

Forbes

6 September 2007