Tax break secured for $500 million Rosebud County wind farm | News

By September 24, 2019 No Comments
Tax break secured for $500 million Rosebud County wind farm | News

A major Montana wind farm within the shadow of Colstrip Power Plant has secured a tax break from Rosebud County commissioners.

Clearwater Wind will receive a 50% tax abatement, cutting the annual taxes on the $500 million wind farm to about $2.93 million in Rosebud County. The 120-turbine project near the community of Angela crosses into Custer County and could eventually touch Garfield County as well. Developer Orion Renewable Energy Group is expected to request tax breaks in Custer and Garfield counties soon.

Construction could begin next year. The abatement was passed on a 2-0 vote earlier in September with Commissioner Robert E. Lee abstaining over an easement interest in the project’s development.

“We are very happy the abatement was granted. This will materially enhance our prospects for success, increasing the chances that a wind project will be sited in Montana, using excess transmission capacity available on the Colstrip system, instead of in Oregon or Washington,” said Ryan McGraw, Orion Renewable Energy Group vice president.

The Pacific Northwest is the wind farm’s target market. The region’s largest utilities already draw electricity from the 2,000-megawatt Colstrip Power Plant. Two of Colstrip’s four coal-fired units are slated for closure in three months. Capacity on the line servicing the power plant is being eyed by several renewable energy projects.

Orion has been insistent its wind farm’s development doesn’t hinge on Units 1 and 2 closing. The two largest southeast Montana communities closest to the wind farm are Forsyth and Miles City, though the development wouldn’t be visible from either community, McGraw said.

A tax abatement for a wind farm in coal country comes with controversy. The Colstrip City Council officially opposed the tax break, while not objecting to the wind farm. The Council passed a resolution calling on the county to put the abatement to a public vote.

Mayor John Williams explained Monday that taxing the wind farm at its full value would have provided money needed as Colstrip Units 1 and 2 not only close, but generate less taxes. The Colstrip community faces large economic challenges.

Speaking with The Gazette in August, Commissioner Lee said the tax assessment of the oldest Colstrip units had flattened out several years ago.

Rosebud County commissioners delayed abatement approval for several weeks over concerns about impact fees and the wear and tear of the construction equipment on county roads. In the end, the county issued a $750,000 impact fee on the project. Orion agreed to post a $2.5 million bond to cover any road damage related to the project.

Weighing in, the Independent Press of Forsyth called neighboring Colstrip’s opposition misguided. “Multi-million dollar investors are not lining up to pour their money into southeastern Montana,” the Press editorialized. Clearwater’s construction is expected to bring several million in spending to the area.

During public testimony, one opponent suggested Orion was behind the closure of the oldest Colstrip units.

There isn’t evidence the Oakland-based renewable energy group played a part in the closure of Units 1 and 2. Rather, the unit’s owners, Pennsylvania-based Talen Energy and Washington-based Puget Sound Energy announced in June that the units were no longer economical at current coal prices. Natural gas and renewable energy have become cheaper sources for electricity generation in recent years. Coal’s share of the energy market has declined from 40% a decade ago to less than 30% currently.

The owners of Colstrip are currently in coal price negotiations with the owners of nearby Rosebud Mine. At least four of Colstrip’s six utility owners have informed regulators that the future price of Rosebud Mine coal could determine the life expectancy of Colstrip Units 3 and 4, as well.

The mine has struggled financially. Former owner Westmoreland Coal Co. went bankrupt earlier this year. The mine is now operated by Westmoreland creditors doing business as Westmoreland Mining LLC.

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