Jasper County Commissioners’ Court met in special session Thursday, Dec. 27, for some yearend business that included an executive session on the Pecos County wind farm project.
The court held a telephone conference with attorney Brad Miller in Midland to review the options on the contract with Pecos Renewable Energy (PRE) to develop a wind farm on Jasper school lands.
Jasper County is one of the few in Texas who still owns their school lands. In 1839 President Mirabeau Lamar deeded three leagues of land in unpopulated West Texas to each county to develop or sell for funds to improve the public school systems.
“Our long-term goal has always been to provide for our children’s future,” said County Judge Mark Allen.
The court has seen other energy giants such as BP moving quickly on wind development in adjacent land in Pecos, but little evidence of progress from PRE. The commissioners voted unanimously to send a letter to PRE requesting that they document whether they have met the milestones required by contract, such as wind measurements and site assessments, and that they prove they have the financial commitment and ability to fulfill the contract.
County Auditor Dru Miller later provided a copy of a letter from 1984 Jasper County Judge Harold E. Kennedy showing that in 10 years from 1974 to 1984 the county distributed more than $1.7 million dollars to the schools, earned from oil and mineral rights in Pecos. But the field played out, and hunting leases and grazing rights don’t bring much income. Miller said there has not been a distribution in about 10 years, and the current available school land balance is only $67,000, not counting escrow accounts and permanent funds.
Texas’ cutting edge on wind energy
Jasper County first advertised for bids to develop a wind power project in July of 2002. The county received two bids, one from Pecos Renewable Energy (PRE) and one from RES North America.
After review and recommendation by the county’s attorneys Mark Morgan and Thane Adkins, the court unanimously voted on Oct. 23, 2002, to accept PRE’s bid.
Five years ago wind energy was a relatively new enterprise to Texans, but in 2006 Texas surpassed California to become the nation’s leader in wind capacity.
Renewable Energy Access says that change was spurred by energy development policies in Texas. In October of this year, the Public Utility Commission designated Competitive Renewable Energy Zones (CREZ) in West Texas and authorized building transmissions lines needed to deliver electricity produced in West Texas and the panhandle.
It’s the equivalent of laying a new pipeline, and will make moving electricity throughout the ERCOT power grid, including Dallas, Houston and San Antonio, economically attractive to developers, according to the Wind Coalition.
This new legislation comes just in time for companies trying to take advantage of the national Production Tax Credit (PTC) approved by Congress and extended to Dec. 31, 2007. The American Wind Energy Association (AWEA) says the PTC “will spur investment, job creation and clean energy production.”
It provides a tax credit for electricity generated with wind turbines over the first 10 years of a project, and is a critical factor in financing new wind farms, according to AWEA.
What’s the bottom line?
What Jasper County schools could gain financially from wind does not compare with the oil revenue they used to receive. Jasper County would receive a royalty of a few percent (variable, three to nine percent) on PRE’s estimate of energy income: a low of $613,000 per year to a high of $1,782,000, based on annual wind speed average. This estimate predates wind studies, which commissioners have said came in with “very favorable” rates, even higher than anticipated.
If PRE can prove they have met the milestones of the contract, they may co-develop a wind farm with their named collaborator, Suzlon Wind Energy, the fifth-leading wind turbine supplier in the world. Or they can flip their lease and sell to another energy company, in which case Jasper County would receive royalties as development occurs.
But unless the contract is terminated and Jasper has an opportunity to seek a new energy partner, PRE has the county’s hands tied for the next 25 years (with automatic renewal for 10 more years) with no contractual obligation to produce anything.
The ball, for now, is in PRE’s court and all Jasper County can do is wait.
By Sharon Kerr
2 January 2008
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