Apex Clean Energy, the developer of the Neosho Ridge wind energy project, on Wednesday released a lengthy economic impact report.
The report was prepared by Dr. David Loomis and Adrienne Ohler of Strategic Economic Research in Bloomington, Ill. Loomis is a professor of economics at Illinois State University and co-founder of the Center for Renewable Energy. Ohler is an associate professor of economics at the same university.
The economists used an analysis method from the National Renewable Energy Laboratory’s latest Jobs and Economic Development Impacts (JEDI) model. It measures direct, indirect and induced economic impacts of the project, and separately studies those impacts during construction and during operating years.
According to the report, the Neosho Ridge project is expected to consist of 139 wind turbines and will represent an investment of more than $500 million.
Because wind energy projects are exempt from property taxes for the first 10 years, Apex plans to enter into a contribution agreement with the county, known as Payment in Lieu of Taxes (PILOT). Apex has offered the county $2,000 per megawatt the project is capable of producing. At this point in the project, the expected capacity is 301.6 MW, but Scheele said that can change slightly until the decision has been made about which turbines will be used.
This is a guaranteed amount, not based on production or percentage of capacity at which the turbines operate, according to Jade Scheele, Senior Development Manager for Apex.
“Our goal is to reach an operation rate of 50 percent,” Scheele said. “That’s the anticipated rate of every project in the wind-belt, but the operation rate does not affect the contribution amount.”
The report shows annual payments from the project of $602,800 during years 2021-2030, for a total of more than $6 million. At year 2031, the annual contribution will increase to $3,840,030 throughout the life of the project, which is expected to be 25 years. The total 25 years of PILOT contributions and property taxes equals $63,628,449, for an average of more than $2.5 million annually.
The PILOT revenue goes directly to the county during the first 10 years. The county has total control over that money and it will determine how those funds are disbursed to other taxing entities during that time.
Scheele said that the initial contribution agreement presented to the county suggests 25 percent of the PILOT contributions to school districts in the county, but the county will make that decision independently.
As property tax is assessed after the 10th year, that money will be disbursed just like any other property taxes amongst the county, Neosho County Community College, Erie school district USD 101 (for purposes of the report, only USD 101 is named, but Scheele said some taxes will go to other schools in the project footprint), the State of Kansas, and the other taxing entities in the area of the project: SEK Library, Southwind Extension, and Cemetery District #5.
The 25-year total to Neosho County is reported as $21,938,171; to USD 101 (et al), $25,898,100; to NCCC, $12,806,520; to the state, $522,090; to SEK Library, $530,095; to Southwind, $487,284; and to the cemetery district, $1,446,189.
All amounts are based on current mil levies.
The effect on jobs will show up both in Neosho County and the State of Kansas. The projected increase in jobs is 478 in the county and 964 in the state during construction, and in the long-term 39 county jobs and 43 state jobs.
The value of goods and services add to the state or local economy is called “output” and is an equivalent measure to the Gross Domestic Product. The report shows expectations during construction of more than $53.6 million in local output and more than $148.2 million in for the State of Kansas. Over the life of the project, local annual output is estimated at more than $7.6 million and more than $9.7 for the state.
In addition to increasing the PILOT amount from the original offer of $1,265 per MW, Scheele said that Apex has also agreed to a setback of 1,640 feet from the center non-participating homes. She said that as soon as the Neosho County Commission agrees with the setback distance, the final plans of the project can be completed and filings with the Federal Aviation Administration updated.
Scheele also expects a report on the anticipated impact on property values to be completed soon.
Apex will host a community forum next Thursday evening from 6:30 – 8:45 pm in the auditorium of Neosho County Community College. The public is welcome to attend and submit questions to a panel of experts.
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