May 15, 2014
Illinois

Decommissioning costs still a concern

By Donna Barker | May 14, 2014 | www.bcrnews.com

PRINCETON – The county of Bureau is moving into negotiations with the new owners of the Big Sky wind farm, located north of Ohio, to determine just how future decommissioning costs of the Big Sky wind farm will be met.

The Bureau County Board’s decision to go into negotiations followed a lengthy board discussion at Tuesday’s meeting, which also included comments from a concerned resident as well as comments from a representative of the new Big Sky owner, the Pittsburgh-based EverPower Wind Co. The new owner has asked the county board to agree to a letter of credit for the decommissioning plan, rather than keep the current cash-on-hand arrangement.

At Tuesday’s meeting, Bureau County State’s Attorney Pat Herrmann said the board has three options: to move forward with the letter of credit of just over $1.9 million, to keep funds as they are currently in a separate county account only for decommissioning or to accept the cash in a cash escrow account to be handled by an escrow agent. The letter of credit would be in the name of the Big Sky wind farm, regardless of whom the owner may be, Herrmann said.

An advantage to a letter of credit is the fact it’s tied to the consumer price index, board member Steve Sondgeroth said. As the cost of decommissioning goes up, so would the amount of the letter of credit, but, still, he realizes cash is king, Sondgeroth said.

Board member Connie Stetson questioned what would happen to the county in the case of a bankruptcy of the wind farm owner.

After giving some explanations and answering questions from the board, Herrmann said he would get further legal opinion for the next board meeting.

Bureau County resident Ed Gerdes addressed the board, representing a “big group of us,” who are concerned about the decommissioning plan, specifically the amount of money for the decommissioning plan and how that money would be guaranteed.

The group of residents had an in-depth study done by a Virginia-based company on decommissioning costs, looking at a specific 87-turbine wind farm, Gerdes said. The total cost to take down 87 turbines was just over $19.4 million, or about $224,000 per turbine. At that rate, the cost to decommission the Big Sky wind farm could be more in the $10 million to $12 million, he said.

“Who’s going to pay for the rest?,” Gerdes asked.” I don’t think the taxpayers should have to pay for taking those down.”

The group’s other concern is that when landowners signed their leases with these companies they were promised the companies would take down the turbines or, if the company was no longer here, the county would have the needed money set aside to take the turbines down, Gerdes said. But Bureau County is not going to have enough money and the landowners might end up with a bill for $150-$200,000 to dispose of the turbines, he said.

The group also has a concern what will happen when the tax law, which sets the tax rate for wind turbines, expires in 2016, Gerdes said.

In his comments to the board, EverPower Wind Co. representative Michael Speerschneider said the proposed $1.9 million letter of credit is an increase from two years ago and that number is expected to increase, with the consumer price index, during the next 17-20 years, the lifespan of a turbine, to close to $3.5 million. EverPower does have the obligation to decommission itself, which is its intent, he said.

When asked about the lifespan of a turbine, Speerschneider said there is the possibility the project will go on operating beyond that, putting up newer technology at that point and going through the permitting process again with the county. It is a good site, which is generating a lot of electricity, and could be re-powered, he said.

URL to article:  https://www.wind-watch.org/news/2014/05/15/decommissioning-costs-still-a-concern/