British Petroleum is renewing its plans to build a wind farm in Young and Archer counties, but the counties will probably see less of a financial windfall when the turbines begin spinning.
Representatives of BP came to Young County Commissioners Court on Monday and told commissioners a new tax abatement agreement would need to be negotiated for the project.
Kerry Albright, property tax representative with BP, said the current agreement is set to expire at the end of the year and construction will not begin in time.
“The problem is it’s really set to begin in 2011,” Albright said. “Because there is no development in 2010, and we don’t expect any in 2010, we’re asking for the agreement to be nullified. We’re now looking at a 2011 to 2012 time frame.”
Fred Mitro with BP told commissioners that much has changed since the company first came to Young County in 2008.
“We’d like to put in a new agreement to reflect our intent, which is to get this project ready for construction in 2011 or 2012,” Mitro said. “There hasn’t been much building at all in Texas in 2010. Wind farms weren’t flourishing in 2009 or 2010.”
Mitro explained that a variety of factors made it difficult to invest hundreds of millions of dollars in wind farms. He explained that lower natural gas prices dropped the cost of electricity which hurt wind farms. The decline in the economy also hurt prices. The tightening of the credit market also made it difficult to get financing for large projects, he said.
With less money and the prospect of much smaller profit margins, most wind farms were put on hold.
In 2010, BP is only building two farms, none in Texas.
The now named Trinity Hills Wind Farm is planned to be a 250-megawatt farm with at least 100 megawatts in Young County. During construction, approximately 150 jobs are expected to be created. Once the work is done, six permanent jobs will be created.
In the old abatement agreement, the county agreed to waive all tax liabilities in exchange for annual payments from BP. In all, the county waived about 50 percent of the expected annual property taxes.
“We’ve got a great agreement in place,” Albright said. “We want to maintain it as much as we can. We wanted to extend it, but unfortunately there’s a one-year limit.”
Mitro said having a new abatement in place will make it so construction can begin as soon as the conditions make it a good investment.
“We really want to position this project so if the conditions improve, we’ll have our ducks in a row and will be ready to move forward,” he said.
Albright said BP would like to keep the existing agreement as a model for a new agreement, but she warned a greater abatement may be needed.
“The reality is the market where it is today is fundamentally different than it was two years ago,” Mitro said. “It’s in the best interest of the county and the best interest of all involved to get a new agreement hammered out. Out goal from a development side is to get everything worked out and get our ducks in a row by the end of the year.”
Alan Lewis told commissioners the wind farm was something they should embrace.
“It’s something that’s going to help the whole county when it comes,” Lewis said. “Anyway we can help these people get started, we should. It’s a gift falling from the sky.”
Wayne Trice said he had some concerns with the plan, saying having wind turbines near Graham would hurt the community.
“If we don’t have some guidelines set down as to where the big tall towers are set, it’s going to look horrible,” Trice said. “Instead of people wanting to move in, people will want to move out. I believe there should be far more discussion.”
Lewis said Graham residents should have no concerns about seeing the towers.
“This particular wind farm is 25 miles from Graham,” he said. “There has not been one negative comment from anyone involved.”
Mitro said the wind farm would tie into existing transmission lines on the edge of the farm and would not require transmission lines off the property.
Commissioners chose not to nullify the existing abatement, telling BP they would do so when a new agreement was reached.
The county will continue to discuss the issue and may hire an attorney to lead negotiations during the next commissioners court meeting Monday.
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