Tax abatement or no that is the question?

By Patsy Stoddard

The main topic of discussion at the commission meeting on Nov. 21 was solar energy and tax incentives.  The presentation by Luigi Resta with Utility Solar Investment regarding Solar Power Projects took up the majority of the meeting. Resta explained to the commission they have been working with the Castle Valley Ranch as the site for the new facility. Resta said the project has taken on an urgency with Rocky Mountain Power’s request for proposals for renewable energy projects. The Utah Public Service Commission has instructed Rocky Mountain Power to look at solar within Utah and their service area which includes Utah, Washington, Wyoming, Idaho and Oregon. An intent to bid must be filed by Nov. 27.
The bids can come from anywhere in Rocky Mountain Power’s service area. The project could be built elsewhere and then power transmitted. Rocky Mountain Power is looking to create a list of potential suppliers. Resta’s company as well as others wishing to bid have until Dec. 11 to submit proof of control of the land, proper permitting and funding and any tax abatements. Resta was requesting information from the Emery County Commission as to whether or  not the county would agree to a 70 percent property tax abatement on the project. Any projects accepted by RMP will have a 25 year power purchase agreement. Project acceptance will be based 80 percent on price of the power and 20 percent on permitting, location, capacity and other preparation.
Resta said he has completed a solar project in Iron County. This was the first solar in the state. The project in Iron County created jobs for three and a half years and continues to add to their economy with operational jobs at the facility. He has completed two units in Iron County. The project was completed with local contractors with only six or seven of the 200 plus workers coming from out of the state. He’s also been involved in a project in Beaver County. At the 800 megawatt facility in Iron County they have 20 full time employees.
Woody Johnson is the land owner at the Castle Valley Ranch where the first project will go, there are plans for a Green River one and two projects as well. Resta said the key is keeping the cost of the power per kilowatt hour as low as possible with 3 cents per kwh being possible. Resta said they submitted their projects in 2016 so they have que position with Rocky Mountain Power. Resta said, “You have a history of energy production here in Emery County. It’s possible to go another 50 years. PacifiCorp is looking to diversify. Coal, hydro, natural gas, solar and wind. Currently natural gas is the cheapest source. PacifiCorp is looking at solar and wind as part of this diversification. There is a planned retirement date for these power plants in the future. As they end their useful life, they will have to augment with something else. There is a lot of investment in your valley. With three phases, (solar) we can make this a solar area.”
Construction per unit would be 12-16 months. From 150-300 jobs would be created and the project would cover 1,500 acres. The project would create close to $500,000 in new money each year for the county and contribute $5.6 million over the life of the project.
Zion’s Bank is currently working on a report of the financial impact to the county of the project for the commission to help them make any decisions regarding the project.
Resta said if they get the contract with PacifiCorp they could build the Green River plants.
Commissioner Lynn Sitterud said he hasn’t ever heard that solar power could be cheaper to produce than coal. Coal produced power is five-six cents per kilowatt hour. Resta said they are able to sell the solar power for three cents because of technological advancements and improved efficiency in the solar industry. What used to cost $1.50 per watt is now down to .80 cents to install. Operational costs are minimal. When the sun is up there is prime performance, but you can’t have solar without another firm source of power for when the sun isn’t shining.
Resta said the date of delivery for the first power from the RFP that Rocky Mountain Power is gathering is Dec. 31, 2020. Resta said when the solar is producing then the coal fired plants will be backed off, when the solar isn’t producing the load will be increased.
Resta said the investment in Emery County would be $220 million during construction. They will not proceed with any construction until they have a legal and binding long term contract with PacifiCorp.
Commissioner Sitterud asked if Resta had met with the school district. Resta said he had and they were supportive. Another reason the project is moving quickly is to capture the federal tax credit which goes away in 2020. Other developers will be submitting bids as well. Resta said in order for them to continue they need to know the conditional use permit will be approved, they need to know if the county commissioners will approve a tax abatement. This tax abatement will need to be under the jurisdiction of a reinvestment agency operated by the county. Currently Emery County is one of two counties statewide that doesn’t have such an agency to develop projects. Resta said Iron County gave them a 70 percent tax abatement and a project in New Mexico gave them a 100 percent tax abatement for the first 10 years after which in year 11 full taxes begin. A project in Georgia was structured with $150,000 level payments each year for 20 years.
Resta said Rocky Mountain Power is accepting bids now and they want to secure the lowest price for their customers. Rocky Mountain Power doesn’t have plans to own any of the projects, they will be power purchasers only.
Commissioner Sitterud asked why Emery County would want to do this when possibly Rocky Mountain Power could put in some solar projects that would be taxed at 100 percent? Resta said his project will be locally assessed, a Rocky Mountain Power project would be centrally assessed.
Sitterud said why would we want to do this? the abatement is the problem.
Resta said Emery County is competing with other counties for these projects. Without an abatement the project will not be built in Emery County. Emery County is a good location for solar. Iron County is even better; the amount of yield goes down as you move north. We can be more competitive with pricing here than in Oregon or Idaho, there is good weather here.
Resta said he has invested $250,000 in the project so far. He said there are plans for a project in Carbon County but they have said no tax abatement, so Resta said he doesn’t expect that project will make the short list.
Commissioner Sitterud said the community reinvestment agency is going to be created even if a tax abatement isn’t granted.
Commissioner Kent Wilson said while attending the Utah Association of Counties meeting, he talked to Iron County Commissioners. They spoke very highly of Luigi. They said solar was a new industry for them. It brought in new money. There were zero costs to their county. Commissioner Wilson said there are impacts from the energy industry, like the roads for the coal mines. Iron County took heat for giving tax abatements, but they said they would rather have 30 percent of something than 100 percent of nothing. Iron County hopes Luigi will come back and do more projects. Commissioner Wilson said he doesn’t think the project will bring in a lot of tax dollars but it will bring in employees.
 The intent to bid must be filed by Nov. 27 and the full proposal by Dec. 11.
Commissioner Sitterud said he’s still concerned about any trickle down effects this project could have on the power plant.
Resta said ramp downs occur with the coal fired power plants when other loads are more plentiful. This will occur whether or not Emery County has solar. The utility will use the lowest priced power at the time.
Commissioner Wilson said the new business model seems to be companies asking which county or state can give them the best deal. Google has done it, and many others. They will locate in your county or area if you will give them a deal. Commissioner Wilson said, “We can sit here and say we don’t want to be a part of it, but that’s the way it’s going.”
“The fate of the power plants is sealed, they only have a finite number of years left,” said Wilson.
The six county coalition is working on getting natural gas to the rural areas. If natural gas was available throughout Emery County it would increase the infrastructure to attract new business.
If the Emery County solar project were to move forward a new substation would be built, this too would increase infrastructure.
Woody Johnson from Castle Valley Ranch said he favors the project for Emery County. He has toured the Beaver facility and thinks it is compatible for Emery County. They plan to keep farming and raising cows and diversify into solar power. “I think it’s good for the county. We want our power plant neighbors to do well, we think you’re on the right track,” said Johnson.
Intermountain Power Project is converting to natural gas so they can continue to sell power to California. Emery County could be a renewable energy zone, too, said Resta and also develop power storage.
Commissioner Wilson said a 2000 watt project is going to be built somewhere, Emery County has the highest tax rate in Utah, this was done so Rocky Mountain Power would have to pay the highest rates possible.
Resta said their project is post performance. The project is built, they pay their taxes and then the county reimburses the company. The project will start paying taxes the year following the investment.
If the commission is to act on the tax abatement before the Dec. 11, deadline they will need to hold a special session. The planning and zoning will need to meet to approve the change to the solar power ordinance.
Commissioner Sitterud said it’s important to him to get the pulse of the county on the issue. He would like to have a special public hearing to gather input.
Commissioner Wilson said, “It’s important to see how the citizens feel.”
There will be a presentation by Eric Dixon from the State of Utah DNR, Division of Water Resources, and Bronson Smart of NRCS to update and inform on the Millsite Dam Rehabilitation Project at the December meeting. There will be an update on the Cottonwood Creek Emergency Watershed Protection Project at the December meeting.
The commission approved the ratification of the letter of support for MCIC for funding from the Bureau of Reclamation for MCIC’s efforts in their salinity offset projects
The board ratification of Change Order No.1 for the Adobe Wash Sediment Basin Project.
The updated Emergency Support Function #10 of the Emery County Emergency Operations Plan was approved. This update corrects any changes in commission and other positions in the county for the emergency plan.  Commissioner Wilson reported they had visited Washington DC and met with Senate leadership, “It appears we will get our public lands bill passed this next year. We met with the PEW foundation and it sounded like they would support it, we felt like we accomplished a lot.”
The county senior citizen Christmas dinner will be held on Dec. 14 at the Orangeville community center.
The board approved the canvass of the election held on Nov. 7. Natalie Humphrey was promoted to Office Manager of the Road Department. Wade Hancock has been selected to return as a part time Weed and Mosquito Tech.