The big wind farm project in eastern Pecos County is still catching favorable breezes.
Rumors were swirling last week that the second phase of the Sherbino Wind Farm had been becalmed because of financial demands made by the Iraan General Hospital District, one of the taxing entities involved with the project. The loss of the planned $250 million project would have meant financial consequences for not only the hospital district, but Pecos County and Iraan-Sheffield Independent School District.
But the hospital district’s board, meeting in special session July 17, voted to approve a 10-year abatement for the second phase of the wind farm, a venture of British Petroleum Alternative Energy.
“BP is not going to pull the project,” said Teresa Callahan, chief executive officer of Iraan General Hospital. “We’re still going forward.”
The hospital district board approved the abatement with payments in lieu of taxes of $825,000. BP is to pay the hospital district $500,000 in the second year, $100,000 each in the fifth and sixth years, and $125,000 in the seventh year, with the first payment to be received in March 2010.
With the approval of the abatement, there should be no obstacles to the project moving forward, Callahan said. She added that the hospital district was the final taxing entity to approve its abatement.
The Pecos County Commissioners Court approved a 10-year abatement in exchange for a PILOT of $1.7 million at its July 14 session.
Iraan-Sheffield ISD superintendent Kevin Allen confirmed that the district approved a 10-year agreement with BP at its regular board meeting July 14 for about $9 million, with the exact figure still to be determined.
“As a Chapter 41 school district, a property-rich school district, the only way for our revenues to increase is gaining students or Chapter 313 agreements,” Allen said. “If we hadn’t made this agreement, they could have built this and we wouldn’t have gained a nickel. … This is very beneficial to the school district.”
Tom Muller, a spokesman for BP America out of Houston, said he had no knowledge of any amounts proposed, other than the $825,000 PILOT proposed by the hospital district.
“Right now, we’re in the development phase of the project,” Muller said. “We’re covering a lot of different phases to see if the project is economically feasible and should go forward.”
The $825,000 PILOT is significantly lower than the amount that was discussed by the board at its regular session July 15. According to the minutes of that meeting, the board put forward a proposal to BP of a $2.95 million PILOT in exchange for the 10-year tax abatement.
Prior to the announcement of the proposal, the board had engaged in a discussion of the abatement and board member Betty Cash said that the board did not feel it was able to approve any abatement at that time, according to the meeting minutes.
Michelle Kent said the only other option that had been discussed and voted on was a proposal for 75 percent of the total tax revenue up front, which was estimated at $3.75 million, according to the minutes. The board then discussed other options before presenting their proposal of $2.95 million.
Muller said that negotiations are often accompanied by rumors, but he said BP remained optimistic about the future of the second phase of the Sherbino Wind Farm.
“We have a good working relationship with the county, the school district and the hospital district,” Muller said. “We feel good about where the project is today.”
24 July 2008
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