February 27, 2019

$50,000 cash fee eyed to cover potential wind-turbine removal costs

Will Brumleve | Ford County Record | 02/26/2019 | www.paxtonrecord.net

PAXTON – Some Ford County Board members feel that requiring the developers of wind farms to pay an upfront fee of $50,000 in cash for every wind turbine they build may not be enough to protect the county from the expenses it could be faced with if it needs to remove turbines because a wind farm has been abandoned.

But those same board members also acknowledge that requiring a cash payment of anything more than $50,000 to cover each turbine’s decommissioning costs might be too much for developers to pay.

“I would like it to be a million dollars for each one, but that’s not practical,” said board member Tom McQuinn of rural Paxton. “So I don’t know. I guess ($50,000) is OK.”

The board’s five-member zoning committee reviewed proposed decommissioning requirements for wind farms Monday night, tentatively agreeing to require that wind-farm developers provide at least $50,000 in cash for each turbine in their project to cover decommissioning costs.

The money would need to be paid prior to building permits being issued. The cash would be placed into an escrow account controlled by the county, allowing the county to immediately access the funds to remove turbines – as well as their concrete foundations, transmission equipment, fences and other structures – if any portion of a wind farm were to be abandoned.

Any turbine that has continuously not generated power for a six-month period would be subject to decommissioning. A wind farm’s owner/operator would be required to provide reports to the board every three months showing the power each turbine has been generating.

Wind-farm owners/operators would be given six months to fix a turbine once it is deemed nonworking, with the granting of an additional six-month extension only possible with the county board’s approval.

The $50,000-per-turbine decommissioning fee would only be accessed by the county if a wind farm’s owner/operator does not voluntarily fix or remove a nonworking turbine. In addition to the cash fee, the owner/operator may also need to provide other financial assurances – such as a surety bond, irrevocable letter of credit or corporate guarantee – to cover decommissioning costs.

Those other financial assurances would be required to be provided only if they are needed to cover any difference between the $50,000 fee already provided and an engineer’s cost estimates for decommissioning a turbine. The wind farm’s owner/operator would be required to pay for an engineer with expertise in decommissioning wind farms to provide the county with an initial cost estimate for a turbine’s removal prior to any turbine being built, and then provide updated estimates every two years. In addition to the cost of removing turbines, the estimates would include costs of repairing roads, bridges and culverts to bring them back to the same condition as they were prior to decommissioning starting.

“Financial assurances to the county shall be adjusted every two years to reflect new cost estimates prepared by the engineer,” reads the proposed regulation.

The county would allow a turbine’s salvage value to be taken out of the financial assurances provided.

In the event that a wind farm owner/operator goes bankrupt and abandons its project – and the county is left with not being able to access the financial assurances as a result – property owners leasing their land to the owner/operator would be responsible for paying any costs exceeding the cash available to the county in escrow. Failure to make up the difference could result in a lien being placed on the landowner’s property.

The $50,000 minimum cash payment that would be required for each turbine is $15,000 higher than the fee originally proposed by the board’s zoning committee last year. Still, board member Ann Ihrke of rural Buckley said it might be worth exploring the possibility of increasing the fee further. Ihrke said neighboring Livingston County requires an initial $67,000 cash payment for each turbine and also requires that all other financial assurances to cover estimated decommissioning costs be converted into cash and placed in an escrow account within six years of a turbine’s construction.

“I think cash is a better deal because you have the cash,” Ihrke said. “I don’t know about these letters of credit. They worry me.”

“My biggest fear is just what happens if they go completely belly-up,” McQuinn added.

“We have to protect the taxpayers of this county,” noted board member Cindy Ihrke of rural Roberts.

While the zoning committee tentatively decided to require only a $50,000 fee, that number could still change. Board members said they would be checking on what other counties have done regarding decommissioning in preparation for further discussing the matter at the committee’s next meeting.

Cindy Ihrke said documents submitted into evidence during a public hearing held last fall by the zoning board of appeals indicated that it could cost as much as $1 million to remove six turbines, with that number not reflecting an estimated reduction in costs of $35,000 in scrap value for each turbine.

Those were not the only figures submitted into evidence, however. An engineering firm hired by wind-farm developers provided its own estimates, which differed from the estimates cited by Cindy Ihrke.

The zoning committee will meet again at 7 p.m. Monday, March 4, in the small courtroom on the first floor of the courthouse in Paxton. The meeting is open to the public.

In addition to possibly further discussing decommissioning regulations, the committee is expected to discuss a proposed “dispute resolution” process for wind farms.

Seven of the 12 county board members were present at Monday night’s meeting, including Chairman Bob Lindgren of rural Loda, board member Tim Nuss of rural Roberts and committee members McQuinn, Cindy Ihrke, Ann Ihrke, Gene May of rural Paxton and Randy Ferguson of Gibson City.

URL to article:  https://www.wind-watch.org/news/2019/02/27/50000-cash-fee-eyed-to-cover-potential-wind-turbine-removal-costs/