The Disgen Marcou Mesa Project went before the Navajo County Board of Supervisors Tuesday and received the support needed to move ahead with its 390-megawatt wind energy facility. The project, to be located approximately six miles north of Joseph City and south of the Navajo Nation border, calls for a multi-phase endeavor that would result in the construction of 130 to 189 wind generating towers and related facilities. The massive project will encompass approximately 33,709 acres of land that consists of both privately owned and state owned property currently used primarily for grazing. There are no residences or other structures on the property.
Aside from the size of the project, which is expected to be more than twice the size of the Dry Lake projects, the Disgen project will also have the distinction of being one of only two wind-generated facilities that is a “merchant facility.” As such, the company would sell its power under a merchant power arrangement that would allow the power to be sold to the highest bidder, not under a single contract.
Project developer Dale Osborn explained that the power produced at the facility would travel to an interconnection that will take place through a Cholla Power Plant substation, then be fed to the Four Corners Power Plant in Fruitland, N.M., which would then be able to serve the entire western United States, enabling the company to sell power not only to the highest bidder, but by the hour.
Osborn believes that the project will not only be profitable for the company, but will provide a significant income for the county and its residents as well. He estimated that local construction services would come to approximately $12 million and that the county would receive approximately $1.6 million in property taxes on an annual basis, the 40 to 50 jobs would bring in $1.25 million and the state would receive $1.5 million in property taxes that would, in turn, go to local schools. In addition, local services would gain $1.5 million through the purchase of tires, supplies, fuel and so forth annually throughout the life of the project.
Finance Director James Menlove advised the board that he felt those figures were highly inflated, given the fact that the total property tax provided to Navajo County now is $6 million annually.
Osborn assured the board that the figures were accurate given the nature of business and the requirements of state law.
Osborn, who has 25 years in the wind industry with projects spanning five continents, went on to explain to the board that this project involves the largest private land agreement in state history. In order to obtain the land for the project, long-term easements for 15,122 acres of privately owned land had to be obtained from 197 landowners. The land is not entirely contiguous, though; there are still 30 landowners from whom the company was unable to obtain easement agreements. According to Osborn, the company has made every effort to contact the landowners, but there have been no responses and the timeframe required to complete the project would not allow for the matter to be pursued further. It was noted that no one opposed the project in the three public meetings, the planning and zoning meeting and the board of supervisors meeting. “Of all the private landowners contacted regarding this project, only 14 of them live in Navajo County,” stated Osborn.
Osborn asked that the board not only give the approval to go ahead with the project, but also allow a variance or waiver of the setback requirement set by ordinance on those remaining properties.
According to county ordinance, the distance of a turbine can be no more than 1.1 times, or 110 percent, the total tower height from the project boundary in order to allow for what is called a “fall-down” distance. Given the potential size of the turbines of up to 495 feet, the required 520-foot setback would not meet the setback requirement in some areas. Osborn had requested the waiver when he went before the county planning and zoning commission on Nov. 17, but it was denied.
If the board supported the commission and staff’s decision to deny the variance that would mean approximately one-third of the proposed wind turbines would need to be relocated further north to the larger properties or removed from the project altogether.
“Essentially, we would be re-allocating those turbines to the rich-folk property and the small landowner would not get the highest and best use of the land,” stated Osborn, adding that the small landowners would essentially be punished for not be able to afford more land and would be denied an opportunity for a return on an otherwise worthless investment.
According to Osborn, each landowner who signed an easement agreement is listed as being co-insured with the company. That means that landowners with a turbine on their land will receive 3.5 percent of the gross revenue earned from that turbine. If an easement agreement is signed without a turbine on the land, the property owner will receive half of a percent of the gross earnings of a turbine placed on a neighboring property for which the easement was requested. Osborn said that at minimum, the landowner without a turbine would be able to use the income to pay the property tax on the land.
Osborn noted that the waiver request would not include turbine proximity to any residences located on the Navajo Nation near the project. The requirement for placement of those turbines are that they be no less than 3,000 feet from the residence unless a sound study proves that they should be even further from the homes.
When the planning and zoning commission denied the request, it cited the rights of the non-participating landowners. While Supervisor Jerry Brownlow agreed with the commission’s decision, the remaining board members viewed the ordinance in a different light.
“When this ordinance was created it was to protect residents that are in proximity to these projects. There are no residents within the project area and it’s not likely that there ever will be,” stated Chairman David Tenney, citing the poor land quality and lack of fresh water on the land.
Supervisor J.R. DeSpain agreed with the concept of a higher and best use for the land, and presented a motion to move ahead with the project and allow the variance. That motion was seconded by Supervisor Jonathan Nez, who clarified that in doing so he would like to know more about the income received by the county from other renewable projects, and that he would like meetings with the Navajo Nation to take place regarding this project and how it will affect the Nation. The motion passed in a 4-1 vote, with Brownlow voting in opposition.
With this approval the project will move forward with a completion date at the end of 2012. This date is crucial to the company, as it will allow for Disgen to receive tax credits that Osborn said would go toward lowering the cost of the product to the public.