John Pimentel and Matt Wilson with Foundation Windpower, LLC met with Teton County Commissioners last Thursday, seeking to submit a second request with the county for a property tax abatement.
The pair met with the commissioners during a work session, so no action was taken. The commissioners scheduled public hearings and advised the wind farm developers that notices would be published in local newspapers.
The meeting came a week after a Fairfield-area resident told the Sun Times that a relative had just left an employer to go to work on the new wind project, the Greenfield Wind Farm, only to be told a few days later that the project was “shut down.”
The Foundation Windpower representatives told commissioners they were “surprised at the property tax” levied on the Fairfield Wind Project, and that it is “important to get something resolved.” They confirmed that construction had stopped on the Greenfield project. Foundation was in the process of building roads to access the new turbines. A visit to the site confirmed new roads were in the process of being constructed with new turbine sites surveyed and graded.
Pimentel old the commissioners that area wind farms are “new and expanding,” and as such need tax abatement, but added, “We want to be taxpayers in the county.”
Pimentel told the commissioners that Foundation was taken aback by the property tax, which came to “about $140,000.” A second blow was the amount of wind at the site. “The wind is about eight and one-half per cent less than expected.” Pimentel went on to say that the costs of the Fairfield Wind Farm are fixed, and that the rate the company charges Northwestern Energy is bound by contract.
Pimentel said Foundation expected the taxes to be “about half” of what they turned out to be. “We may not be able to service the debt on the Fairfield project,” he added.
According to Pimentel and Wilson the Fairfield turbines required more unplanned maintenance than expected. When asked by the Sun Times if this was related to the apparent hydraulic fluid leaks evidenced by the stains on the blades, spinner and towers of most, if not all of the turbines, Wilson said it was. When questioned further by the Sun Times as to whether or not this might pose a safety threat, Wilson said it did not, but refused to discuss the matter further citing a non-disclosure agreement.
Commissioner Ron Ostberg asked about turbine “T4,” saying that the turbine seemed to be slower than the others. Pimentel and Wilson explained that there was an issue with the pitch mechanism that sets the angle of the blades.
“We have real data for Fairfield,” said Pimentel. “The state is taking it [tax abatement request] under consideration, we would like to resubmit the tax abatement application for Fairfield and submit one for the Greenfield project.” Matt Wilson said that Foundation would need to know the taxes they will pay “before we re-mobilize.”
The Sun Times asked the Foundation representatives how much Northwestern Energy was paying to the wind-generated electricity, and was told that the Greenfield Project was contracted at $50 per megawatt hour (MWh), and that the Fairfield Wind Farm was contracted at a “slightly higher” rate.
The Sun Times examined the June 2015 “proposed” rates paid by Northwestern Energy and found that the Fairfield Wind Farm is charging $54.44 for off-peak energy and $90.87 for on-peak usage. Only Sleeping Giant Power, at $92.73/MWh (on-peak), is higher.
By comparison, a MWh produced at the Colstrip Unit 4 coal plant is projected to go for $59.94.
Asked how off-peak and on-peak was defined, Will Rosquist with the Public Service Commission said in an email response, “the ‘on peak’ period is defined as the period 7 am to 11 pm, Monday through Saturday (excluding holidays), in the months of January, February, July, August, and December. All other hours of the year are defined as ‘off peak.’”
County commissioner Joe Dellwo asked if the state Department of Revenue had responded to Foundation’s request, Wilson said they expected a response in a couple of weeks.
Pimentel said that the “business of renewable energy is not a profitable one. Our banks are not happy.” One of the banks involved is U.S. Bank, according to Foundation. Foundation spent $20 million on the Fairfield project and expected to spend $50 million on the Greenfield undertaking. The Fairfield project has a projected life of 20 years, while Foundation expects the Greenfield project to have a life of 25 years.
Commissioner Ron Ostberg said that the problem with property tax abatement is that the rest of the county has to make up the difference.
Pimentel and Wilson said that if the Greenfield project proceeds, the company will have large enough operation in place to justify hiring a couple of local employees to perform maintenance, saying the employees would be based at an office at the wind farms. Some of the maintenance is currently done by a crew travelling from the Spion Kop wind farm.
When the commissioners asked about Marty Wilde, who had worked on the two wind projects, Pimentel and Wilson would only respond, “You should ask Marty about that.”
As the meeting came to a close, the commissioners asked, “If there is no abatement, will the project be cancelled?” Pimentel replied, “It is up to the Department of Revenue and the county.”