October 20, 2018
New Mexico

County moves wind farm deal forward

Written by Silver City Daily Press on October 19, 2018 | www.scdailypress.com

The Grant County Commission took the first step Thursday morning toward what amounts to an incentive deal for a wind farm project proposed for the southern reaches of the county. After initial public reaction to the project, however, several commissioners had some serious questions for the project’s developers.

The Great Divide Wind Farm, which was first presented to the public at the commissioners’ work session on Tuesday, is being developed by Boulder, Colo.-based renewable energy developer Scout Clean Energy LLC. The project’s estimated 60 to 100 wind turbines would be spread across 23,000 acres in the southern tail of the county, 14 miles east of Lordsburg.

Scout Clean Energy is seeking $400 million in Industrial Revenue Bonds from the county government, a complex process specific to New Mexico that basically creates a vehicle for the county and the Silver Consolidated School District – the two entities that primarily benefit from property tax collected in the area – to offer wind farm developers an exemption from property and most gross receipts taxes, while simultaneously collecting more revenue than they would receive otherwise through payments in lieu of taxes, or PILOT payments, from the developers throughout the life of the project. The Silver school board would have to negotiate their own deal with the developers, separate from the county.

Developers estimate that the 250 megawatt wind farm could power 100,000 New Mexico homes, although it seems likely that much of the power would be sold out-of-state.

“Part of that depends on our off-taker – our power purchaser,” said Bob Karsted, a project manager for Scout Clean Energy. No contracts for the sale of the energy have been negotiated yet, Karsted said, although there are many options.

“It could be any combination of utilities or, potentially, commercial-industrial partners,” explained Mike Greczyn, a consultant to the project’s developer. “It’s becoming increasingly common for large public companies who wish to purchase renewable energy to go straight to the source – to sign a contract with a company like Scout and Facebook, Walmart, Google.”

District 3 Commissioner Alicia Edwards, who was chairing the meeting in Chair Billy Billings’ absence, asked how much New Mexicans might benefit from the electricity generated by the wind farm.

“Somebody, somewhere might be purchasing the output from a certain plant. There’s a whole market of people buying and selling electricity at different times,” Greczyn said. “And then there’s the impact of putting electricity onto a grid. Regardless of who signed what contract, we can’t determine where electricity goes. It goes where it’s needed.

“Many products are created and exported across state lines,” he continued. “There’s an extent to which those benefit local economic interests, but the product is bought and sold elsewhere. So this is similar.”

Tuesday’s presentation to the commission included a slide stating that the project had “[l]ow environmental risk with 1+ years of avian and bat studies completed at site.” Both Edwards and District 5 Commissioner Harry Browne grilled the developers on the impact of the wind turbines on migratory and other birds in the area, and both seemed to question whether the county could somehow regulate impacts on birds and bats through the Industrial Revenue Bond agreement or subsequent leaseback of the project to the developers.

“In the time from Tuesday to now, I had several phone calls about this issue,” Edwards said.

Greczyn told commissioners that the studies had been ongoing since 2017, and had not yet been completed, although they had been shared with New Mexico Game and Fish, the U.S. Fish and Wildlife Service and other regulatory agencies.

“Scout is conducting the study, with advisory input from Game and Fish,” Greczyn said. “As far as how it dovetails with the IRB process, I’m not sure at this point.”

“Avian studies in particular are a minimum of one year, because bird use changes with the seasons,” Greczyn told the Daily Press. “Those studies are designed by biologists in consultation with the [regulatory] agencies. … During high-use periods, so seasons when the avian population is especially active, the biologists will go out there on a weekly basis, and during slower seasons they’ll go out there on a biweekly basis. They go out there to the same spots, 30 minutes at a time, so they can see how use changes over the year. So we’ve done a full year of that, and the results of that are sort of being digested by the consultants and the agencies.”

Greczyn also told the Daily Press that project developers have strong incentives to follow the government’s recommendations.

“It’s usually a very good idea to accommodate those recommendations. For example, laws like the Bald and Golden Eagle Protection Act are strict-liability laws, whereby if you kill a golden eagle or a bald eagle, it’s criminal, regardless of whether you intended to do so or not. And the agency has a lot of discretion whether or not to prosecute it,” he said. “If an agency told a company, ‘You have the potential for take’ – which is the term of art for killing a golden eagle or a bald eagle – ‘you have the potential for take, and you need to get a permit,’ and the company does not get the permit, and they kill an eagle, there’s a higher likelihood of being prosecuted.”

During a break in Thursday’s meeting, Greczyn told the media that the company has a range of options for accommodating birds and bats, from eliminating turbines from areas frequented by raptors and other birds, to completely shutting down the wind farm or parts thereof during sensitive weeks of the year when migrations are underway.

He also explained to the commission that the project had an additional layer of oversight from the state, because about half of the property under consideration for the wind farm is state trust land.

District 1 Commissioner Gabe Ramos, who was absent from Tuesday’s work session, was particularly interested in the economic impact for the county. District 2 Commissioner Brett Kasten explained that almost any amount the county would receive in PILOT payments under the deal would represent a net gain.

“Currently, about half of that is private land, and we’re getting agricultural rates on that, which is fairly small,” Kasten said. “What our goal is … is to negotiate that rate so that we receive more than we’re receiving now.

“And the other thing is, is on that state land, you’re not getting any revenue. So that’s another negotiating point – now there’s facilities on that state land,” Kasten continued.

Thursday’s action by the commission is only the first step in a long process.

“Approving this [inducement resolution] simply starts the conversation between the county and Scout, and the next step would be a series of more detailed documents that would set up the structures involved in that process,” Greczyn told commissioners. “There would be the bond ordinance and the lease between the county and Scout, and a couple of other key documents that we would prepare. Just looking at that process is about two to three months – or longer, depending on how fast we can agree on language.”

If all goes smoothly, Greczyn said, the project could break ground next year, and be generating power by the end of 2020.

In other business Thursday, commissioners unanimously approved a new collective bargaining agreement for union-represented county employees, the result of negotiations that have lasted many months. They also adopted a revised employee manual, although commissioners suggested further changes in grievance processes for non-union employees, particularly those who report directly to the county manager.

“It’s not about Charlene [Webb] as county manager, it’s about any county manager we might hire,” Commissioner Edwards said. “These kinds of policy documents, they’re not about personalities, they’re about process.”

Commissioners postponed a vote on one-year contract extensions for both Webb and County Attorney Abigail Burgess until “at least November,” in a brief motion following more than an hour in closed session to discuss the contracts.

“We’re not doing this for any other reason than we are short one commissioner,” Commissioner Kasten said. “We feel as though employment contracts should have all commissioners here, so they can all five sign them. We talked about it, and that’s what we’re going to do.”

They unanimously approved the New Mexico Counties legislative priorities, an amendment to a grant agreement for the recently opened Tu Casa project, a Homeland Security and emergency management grant, a bid for an addition to Whiskey Creek Volunteer Fire Station No. 2 and a bid for a new Tyrone Access Road bridge. They also approved nearly $19,000 in county health plan claims and an indigent burial.

URL to article:  https://www.wind-watch.org/news/2018/10/20/county-moves-wind-farm-deal-forward/