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Willacy offers wind farm a tax break

RAYMONDVILLE – Willacy County commissioners have offered a tax break to a wind farm operator after turning down the company’s proposal to waive property taxes in lieu of a flat yearly payment for 10 years.

County Judge John F. Gonzales Jr. said Tuesday that E.ON Climate and Renewables had offered an annual payment to the county of about $460,000 over the next decade.

Gonzales said E.ON has proposed construction of 112 to 116 wind turbines in an area north of FM 186 and east of Interstate 69E, doubling the number of turbines in Willacy County.

At a special meeting, commissioners took no action after meeting with county-contracted attorney Kevin O’Hanlon, an Austin lawyer hired at a rate of $175 an hour to help the county negotiate an agreement.

Gonzales said commissioners turned down E.ON’s offer to waive taxes in lieu of payments of $2,000 per megawatt that the proposed wind farm would generate per year.

E.ON estimates the proposed wind farm would generate about 230 megawatts, resulting in annual payments of about $460,000 during the 10-year period, Gonzales said.

“We have to collect some taxes,” Gonzales said after the meeting. “We countered with something else. We’re trying to get a fair deal. They’re not offering a fair deal.”

The proposed project would be E.ON’s second in Willacy County.

In 2009, the company launched a project that built 112 wind turbines in a 10-mile area east of I-69E and north of FM 186 between Raymondville and Port Mansfield.

The county offered E.ON a 70 percent tax break for its first project in 2009 but did not negotiate an in-lieu-of-taxes agreement, said Gonzales, who did not hold office at the time.

“Just like any other big company, when they go into a county they try to negotiate a tax break,” Gonzales said. “If we don’t give them a tax break there’s a good chance they’ll go somewhere else.”

As part of the company’s latest proposal, most of E.ON’s wind turbines would be built within the San Perlita school district, school Superintendent Albert Peña said.

“If there’s additional money that allows us to do things for students that we normally couldn’t do, we owe it to our children to look in to it,” Peña said in a telephone interview.

This year, E.ON’s first project generated about $400,000 for the school district that has a general fund budget of about $3 million, Peña said.

E.ON was the first wind farm to come into the county.

In 2010, Duke Energy launched a project that built 171 wind turbines in over a 20,000-acre area east of Sebastian in Willacy and Cameron counties.

Willacy County offered Duke an 85 percent tax break in exchange for annual payments in lieu of taxes of $260,000, Gonzales said. Officials said the two wind farms generated $591,000 in property tax revenue in 2013, the first year they yielded tax revenues. Gonzales said the companies’ tax breaks expire in 2023.

Peña said Duke did not build turbines within the school district’s boundaries.