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$125M wind bond project approved by Lincoln County commissioners  

Credit:  Industrial bonds approved for Red Cloud wind project | Dianne L. Stallings | Ruidoso News | March 19, 2020 | www.ruidosonews.com ~~

Tuesday, Lincoln County Commissioners approved issuance of a $125-million industrial revenue bond for the Red Cloud Wind LLC project, based primarily in the neighboring counties of Guadalupe and Torrance.

At the same session, they took no action on the issuance of $120- million in bonds for the Duran Mesa LLC project, because it was withdrawn by Pattern Energy.

Commissioners split on a $196,000 bond issue for the Teolote Wind LLC project, which Pattern Business Development Director Crystal Coffman said was proposed as a stand-in to create the ability to add additional megawatts (MW) of power to the Red Cloud project, if the opportunity developed.

Commissioners Tom Stewart and Lynn Willard voted for the motion to approve the Teolote bonds and Commissioners Elaine Allen and Dallas Draper voted against, which caused the motion to fail. The tie could not be broken, because Commissioner Preston Stone was absent.

Last minute negotiations paved the way for unanimous approval of the Red Cloud bonds, with commissioners rejecting an initial offer from Pattern for a payment in lieu of taxes to the county of $2,100 per MW produced.

Willard wanted a figure closer to the $2,800 to be paid for the Mesa Wind project around Corona, but compromised with an offer of $2,400. Coffmon came back with $2,250, but Allen proposed rounding up to $2,300 per MW. By the time the haggling was finished, Coffmon agreed to the $2,300 per MW figure with no minimum number of megawatts.

“We accept,” Allen said.

At one point, commissioners took a break for their attorney Alan Morel to work on wording with the county bond counsel to specify that approval of the PILT payment must occur prior to delivery of the bonds.

“I’m concerned adopting an ordinance with items in there not yet agreed to and somehow be bound to something,” Morel said, noting that agreement might not be reached later.

Coffmon said not moving ahead with approval would cause a 30-day delay. The projects need to move forward to meet the 80 percent tax credit timeline. If that is missed, the value goes down to 60 percent, lowering financial feasibility, she said.

Don Monheimer with the Rodey Law firm representing Pattern, said the dollar amount would be in the lease and didn’t have to be included in the ordinance. A lease wouldn’t be signed until the commission was in agreement.

Coffmon pointed out that the Mesa Canyon wind farm near Corona already approved, including with industrial bonds, is more than ten times the number of megawatts being proposed for production at Red Cloud at 80 MW.

Red Cloud was not approved in time to qualify for the 100 percent tax credit, only 80 percent, Coffmon said.

“So there is less economic value in the project,” she said. She initially offered $2,100 per MW, based on the smaller size and the loss of the percentage valuation, she said. Using that lower figure, about $166,000 would have been paid to the county annually, with $111,000 going to the county and $55,000 to the school district. Only the Corona school district is affected by Red Cloud.

The county previously approved a 67 percent-33 percent split of the PILT payments, with the lower percentage being split among any affected school districts.

The numbers are staggering for a small New Mexico county, commissioners acknowledge. But they emphasize that the county is not liable for repayment of the $2.8 billion approved for industrial bonds connected to wind power projects.

Other wind projects in the county already approved include Mesa Canyons wind farm and the Corona project that will serve Western Spirits and SunZia transmission lines. They will be built in phases, she said.

All of the PILT numbers for those two are based on 100 percent tax credit. Mesa Canyons is expected to produce 1,000 MW and Pattern will pay $2,800 per MW installed to the county, generating $2.8 million per year divided among schools districts and the county on the 67-33 split. Production is projected for 2021 on Red Cloud and 2023-2024 for Mesa Canyon, Coffmon said.

“Red Cloud is a piece of the next phase, a smaller piece for Lincoln County, but part of our bigger plan,” she said.

Coffmon said the county could see a return on the project a year after production begins.

“So nothing next year. We’re in trouble in our budget,” Stewart said. “I’m really concerned about the balances we are facing here and the financial future of the county. We had a very expensive month last month. We used to be in the green up $700,000, and now we’re down $400,000.”

County Treasurer Beverly Calaway said major projects such as the detention center, roads and the new county hospital in Ruidoso hit the county’s coffer hard, but it is rebounding.

She also pulled $3-million of county money from the state’s investment pools, because she previously lived through the effects of Sept. 11 and the financial crash of 2008, and she didn’t feel comfortable with the coronavirus disruption of the economy. The money was invested with a local financial institution and collateralized by 102 percent, she said.

She also opposed any effort to delay collection of the second half of the annual property taxes in April.

“It is important we have them coming in,” she said. “The schools, municipalities, hospital and clinics depend on us and distributions to them on monthly basis,” Calaway said.

“We will have PILT money (from federal land within the county’s borders) coming in before the end of June and property tax money coming in,” she said. “We should see $12 million for the county property taxes collected. I feel confident we will not be in the negative.

“The ending balance was $7.9 million for the general fund today.”

Source:  Industrial bonds approved for Red Cloud wind project | Dianne L. Stallings | Ruidoso News | March 19, 2020 | www.ruidosonews.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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