Another Solar Farm in Coal Country, Utah?

Sevier Valley and a portion of Sigurd, Utah are located less than 70 miles from Capitol Reef, National Park.   File photo

A solar generating farm in the heart of Utah is inching its way toward reality

SEVIER COUNTY, UTAH – At Monday’s county commissioners meeting in Richfield, all of the players were assembled to discuss the ongoing proposal for a small (40Mw) solar power generating “farm” in Sigurd,  a small town with less than 500 residents, at the site of a once-proposed coal-fired power plant. Once the solar proposal plan had been identified and received in late 2015 by county administrator and economic development director Malcolm Nash, he set about to determine how the county could proceed with the idea and still protect the interests of everyone involved, including its 20,000 residents.

The result of that effort was the creation of the Sevier County Reinvestment Agency (SCRA) which is a legal management template often used in other locations for the use of public funds. The organization of the Reinvestment Agency allows for the reassessment of privately-owned real property (in this case, undeveloped rangeland and green belt underneath high-tension transmission lines) whose property tax potential is otherwise limited.

The SCRA has three board members, who also serve as the three current Sevier County Commissioners: Ken May, Garth “Tooter” Ogden and Ralph Brown. The regular commissioners’ meeting was temporarily interrupted with a motion to move into a public comment meeting for the SCRA. About a dozen people were in attendance in this early afternoon, including Community Solar (known sometimes as Sigurd Solar) principals, Denver developer Sam Sours and Angie Anderson,  Adam Long from the Salt Lake City law firm of Smith-Hartvigsen, who provided the template and additional counsel to Sevier County and Community Energy Solar.

In a concise verbal presentation, Nash identified the decisions facing the Reinvestment Agency for public comment, decisions which mostly involve the implied costs to the county (impact on roads and other infrastructure) and the way that a development with minimal economic impact (for revenue or after-installation employment) could be organized for a win-win increase to the county’s tax revenues. The solar company representatives were there to understand how incentives from the county might apply.

Tax Incentives to Seed Business Development

In the late 90’s Sevier County courted the possible development of a transportation hub for WalMart stores. During that time that the county was extremely hesitant to offer any kind of tax credit or any other customary investment incentive that could seal a deal. Proponents of the WalMart shipping hub called for the validation of the incentives, based on additional jobs, commerce, and population increases that would contribute to an increased tax base, adding that the intersection of Interstate 70 and 15 made the location ideal. The hub was subsequently located in Washington County near St. George.

When that deal fell through the hub was subsequently located in Washington County outside of St. George.

The same arguments were made when Sevier Power began initial plans for a coal-fired generating plant in roughly the same location in Sigurd as the present solar farm developers propose. The commonalities are a power substation for easy access to the generated power to the grid. The coal plant plan was amended to be a natural gas plant which many locals still opposed since the revised plan increased overall output and noxious emissions in a small valley ringed with mountains. The fossil fuels plant concept eventually fell victim to macro economics including the disinterest of Rocky Mountain Power, the utility company subsidiary of PacifiCorp. RMP was not interested in buying power from what they termed as a relatively small, “merchant plant” even though rural power cooperatives were still serious supporters. Ultimately construction financing became a bigger issue that terminated the developer’s plan.

The fossil fuel fired plant concept eventually fell off due to an eventual disinterest by Rocky Mountain Power, the utility company subsidiary of PacifiCorp, to expand. Rocky Mountain Power was not interested in buying power from what they termed as a relatively small, “merchant plant” even though rural power cooperatives were still serious supporters. Ultimately construction financing became a bigger issue that terminated the developer’s plan.

Solar panels generating effortless and low-impact energy for the grid. Photo: Green State Power

Current Discussion on Solar Incentives in Sevier County

While the “Sigurd Solar Community Solar Reinvestment Area Plan” was adopted by the Commission/Agency on that Monday, August 14, still at issue is the amount of incentive that the county’s agency will agree to offer the developers. Pressed for their positions by some of the public assembled, Commissioner and agency director Ken May (who is the CEO of coal mining operations at SUFCO Canyon Fuels in Salina canyon) was emphatic at making no comment during this public comment meeting. Commissioner/Director Ralph Brown assured the audience that he would oppose the 70 percent incentive identified in the plan, which would be applied to offset charges incurred for flood control, highway maintenance and related costs. Commissioner/director Ogden made no indication as to his vote on the amount.

All of the county/agency authorities were concerned about the possible precedent of offering Community Energy Solar a 70 percent incentive, fearing that subsequent business developers would expect the same. It was pointed-out that development proposals could be reasonably expected to be reviewed on a case-by-case basis given that all are different in the amount of tax base revenues which could apply. Through this reinvestment agency, the solar project under discussion has the potential of increasing the county’s tax base by more than $9 million over the upcoming 20 years. That would be more than $450,000 annually to benefit the county’s budget and that of the local public school district. This is important to the local citizenry since late in 2015 a loss of coal-mining revenues made a 73% property tax increase necessary to balance the county’s budget. Public employee salaried positions and school district budgets have been under continual review since that time.

This is important to the local citizenry since late in 2015 a loss of coal-mining revenues made a 73 percent property tax increase necessary to balance the county’s budget. Public employee salaried positions and school district budgets have been under continual review since that time.

A solar project in nearby Parowan, Iron County, Utah commenced with the 70 percent incentive but was much larger than the one proposed in Sigurd. A solar boom of sorts is underway in Utah where the first projects were commissioned by Rocky Mountain Power with some as small as 20Mw. The solar industry is not without some volatility when considering the declining cost of solar cell manufacture and regulatory influences at the national level.

A solar boom of sorts is underway in Utah where the first projects were commissioned by Rocky Mountain Power with some as small as 20Mw.

Next Steps for Sevier County’s Proposed Solar Farm Development

Sam Sours, principal for Community Energy Solar in Denver, told Utah Political Capitol that the next steps are all up to the commissioners/directors and how much they will agree to accommodate for this project. “We are at least a year from being able to break ground on this project. While acknowledging that time may benefit the cost of his procurement of solar panels, when asked about the Federal Energy Regulatory Commission (FERC) considerations in a Secretary Perry era, Sours said, “Those changes occur daily. We watch them very closely.”

Additionally, this past April SUNIVA Corporation filed a petition with the US International Trade Commission seeking trade tariffs on solar cells and minimum prices for solar modules imports. Sours said that he’s watching those developments as what some have termed a “solar trade war,” very closely because any tariffs would directly affect the cost of his development. Many feel that Suniva’s request may be approved by the 200+ day-old Trump administration.

Malcolm Nash indicated that any substantive decisions on the part of the commissioners/directors in Sevier County would take at least another two to three weeks. “That would include how much incentive to agree to or any incentive at all.” Nash also indicated that incentives from the school district could be on the table and that district officials would also be included in these remaining discussions by the Reinvestment Agency.

Meanwhile, the sun keeps shining in rural Utah, interrupted only occasionally by a summertime shower.

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