KINGMAN – Kingman County reached a new agreement with Flat Ridge 2 Wind Energy LLC to ensure the county continues to receive an annual payment in lieu of taxes from the commercial wind farm.
In October 2011 prior to the wind farm’s construction, Kingman County entered into an agreement with the wind farm, which is jointly owned by BP Wind Energy and Sempra U.S. Gas & Power. According to a news release from the county, the first PILOT payment of $312,000 was received by the county in 2013 for the 2012 operation year. The PILOT is based on megawatts of installed electric capacity and the agreement specifies that the payment will increase by 2 percent each year.
The settlement allows the wind farm to reduce its annual payment by the total amount of any tax increases levied on property with wind turbine sites. Flat Ridge 2 made the 2013 payment of $310,083.20 earlier this month. The funds have been placed in the county’s capital improvement fund for a new law enforcement center.
County Commission Chair Carol Voran said the agreement was the best possible situation for all parties involved.
“It was wise to do what we did,” she said. “We know the need has not gone away and we’re saving for it.”
Voran said the law enforcement center is currently still in the planning phase.
Last year a special election asked voters to enact a new, countywide one-quarter cent retailers’ sales tax and to extend a current three-quarter cent countywide sales tax to help fund a new law enforcement center. The sales tax question failed.
According to the release, Flat Ridge 2 disputed making the next payment, for the 2013 year, and the county entered into legal negotiations to resolve the matter.
An issue raised in the dispute was a property reclassification of wind turbine sites that increased the assessed ad valorem tax on those properties. The wind farm argued it was being taxed, even though the county assessed the higher taxes only to landowners.
Both parties agreed to the settlement to avoid “lengthy and costly litigation” over the annual payment, according to the document, which was signed by Kingman County commissioners on Aug. 11.
The Flat Ridge 2 wind farm went into operation in December 2012. It is the largest, single-build commercial wind farm in the United States and the largest commercial wind farm in Kansas. Its 294 wind turbines are located across portions of Barber, Harper, Kingman and Sumner counties. The wind farm has contracted to sell electricity to three out-of-state utilities through the year 2037. Sixty-five wind turbines are located in Kingman County. Flat Ridge 2 is the first wind farm built in the county.
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