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Company, county officials working out financial security
Credit: Will Brumleve, The News-Gazette, www.news-gazette.com 1 January 2012 ~~
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Translate: FROM English | TO English
WATSEKA – Officials with E.On Climate & Renewables, the developer of two wind farms in operation in Iroquois County, said they are working with State’s Attorney Jim Devine to negotiate how to provide financial securities related to the decommissioning of wind turbines.
Under the county’s decommissioning plan for wind turbines – before revisions made last month – developers were required to pay a $10,000 surety bond for each turbine. But no bonds have been collected for E.On’s two wind farms – the Settler’s Trail Wind Farm near Sheldon and the Pioneer Trail Wind Farm near Loda.
Matt Tulis, communications manager for E.On, said that before construction his firm had “agreed to put some sort of financial security in place in the amount of $10,000 per turbine,” but he said payment has not been made because “there was never any timing associated with that.
“So what we’ve been doing is working with the county board, through the state’s attorney’s office, to establish the timeline to put that in place and then a structure acceptable to the county – the type of financial instrument to be put in place,” Tulis said.
Devine said the reason he and the county’s zoning office did not require the $10,000 surety bond be collected before construction is that “they’d known and I’ve known that this decommissioning plan was going to be updated.” Devine said he also felt the financial securities should be negotiated for E.On’s projects because a surety bond can become worthless if a company goes bankrupt.
“Surety bonds are basically insurance products,” Devine explained. “The problem is that it’s only good as long as the insurance premiums are being paid by the company. If the company goes under, the insurance premiums won’t be paid, so the bonds become worthless (and the county then has to pay the cost of removing turbines).”
Devine said he is now “trying to draft something that provides more financial protection for the county” than the surety bond that was required. Devine said negotiations with E.On are ongoing.
Devine said he would “highly doubt” E.On would agree to provide the $50,000 in cash escrow now required for each turbine built, as stated in a revised decommissioning plan approved recently. But Devine said that “at the very least (E.On) will be (paying) the $10,000 surety bond” as required by the ordinance.
With 97 turbines in the Settler’s Trail Wind Farm near Sheldon and 17 included in the Pioneer Trail Wind Farm near Loda, E.On would owe Iroquois County surety bonds totaling at least $1.14 million under the latter option.
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