Solar farms could bring millions of dollars for local governments in the form of payments in lieu of taxes, they could cost millions in lost agriculture or they could mean both. The Union County Commissioners are working with attorneys to make sure the county and townships are in the best position to negotiate with proposed and potential solar farms. (Photo submitted)
Commissioner: Ag businesses could lose $12.5M each year
The Union County Commissioners met recently with representatives from Frost Brown Todd, the legal firm hired to help the county commissioners negotiate with several potential solar developments.
Attorney Thad Boggs detailed the process solar farms go through for approval. He called it “labyrinthian.”
He explained there is a mechanism for a solar facility to receive a tax abatement if they agree to make a payment in lieu of taxes (PILOT).
The commissioners would need to approve any PILOT. Generally, a PILOT exempts the property from tangible personal property tax and real property tax in exchange for an annual payment of up to $9,000 per megawatt generated. Of that that payment, $7,000 is divided among taxing entities with the other $2,000 per acre going into the county general fund. To qualify for the PILOT, a certain percentage of the construction workforce must be from Ohio, the developer must enter a road use maintenance agreement with the county, there must be a first-responder training program and there must be an apprenticeship program for the utility.
Boggs explained that the PILOT often benefits both the county and the utility company. He said the payment is set for the life of the project, but the equipment value and tax payment would depreciate over time.
In an analysis provided by Frost Brown Todd, taxes paid on one of the two proposed solar farms would total nearly $144,000 a year. With the PILOT, that land would generate more than $2.6 million per year. Frost Brown Todd estimated that over the life of the project, the PILOT would generate more than $86.6 million more for the county and other entities than the tax revenue.
County Commissioner Steve Robinson said his concern is the loss of agricultural land.
Boggs said that “certainly is a consideration that is not overlooked.”
Robinson said that based on his estimates, if the property owners do not farm the land associated with the two currently proposed projects, it will mean a loss of nearly $12.5 million annually for ag businesses in the loss of crops, as well as sale of chemicals, fertilizer, seed, machinery and fuel and payments to the farm services agency. His estimate did not include the annual lease revenue generated for the actual property owner.
Robinson asked about drainage. He said he has looked over the solar company’s plan for dealing with potential drainage issues and “it didn’t look adequate.”
He said if the company breaks a drainage tile during construction, there could be problems in the future. During a meeting earlier this year, Hardin County Commissioner Roger Crowe told the local commissioners that in his county the developer hired a local tile company to be on-site during construction. He said that when construction hit a tile, the tile company immediately fixed the issue. He said the quality of the repair would be dependent on the quality of the local contractor.
Commissioner Dave Burke asked who would be responsible if the solar panels changed the storm water drainage in the area.
Boggs said the Ohio Power Siting Board permission does not mean the project is exempt from rules about altering drainage. He said liability would depend on the lease agreement the property owner has with the developer.
Boggs said that while the commissioners do not make the final decision, the commissioners can negotiate with the developers for things like repair of broken tiles and storm water drainage concerns.
County Engineer Jeff Stauch said he has concerns about the road usage maintenance agreement. He said he has had preliminary discussions with the developers, but “we are not talking any details just yet.”
He noted that “to date they all seem very favorable to working with us.”
Stauch said he has asked for but not yet seen any traffic impact studies on the solar farms. Commissioners noted that residents in the area are very concerned about construction traffic.
The engineer asked about the timing of the road use agreement.
Boggs said it is not necessary to have a final agreement by June 1, but it would be good to have “a firm idea of what is going to be in that agreement.”
Stauch said officials will need to “hustle” to work with the developers.
“We will have to keep moving so we don’t miss these important dates before it is too late,” Stauch said.
Boggs said that while the commissioners do not have many options to stop a solar facility, there are ways they can impact it.
Liberty Township Trustee Mike Moffett asked if the trustees have a voice in the process and if they do, “how much teeth does it have?”
Frost Brown Todd officials said township leaders do not have many options other than to work and negotiate with the developer.
“Apparently we can’t say, ‘No. You can’t come in,’” Moffett said. “But we could justify why we need certain setbacks and things.”
Boggs said OPSB permits solar farms and was created in 1972 “to support sound energy policies that provide for the installation of energy capacity and transmission infrastructure for the benefit of Ohio citizens, promoting the state’s economic interests, and protecting the environment and land use.”
The board is composed of seven voting members — the chairman of the Public Utilities Commission of Ohio as well as directors of the state’s departments of health, agriculture, natural resources, The Ohio Environmental Protection Agency and Development Services Agency along with an appointee that is an engineer and a member of the general public— and four non-voting members from the Ohio General Assembly.
The idea was to create a method for centralized state control of siting of major utility facilities and take the control away from local authorities. He said legislators determined everyone wanted power, but no one wanted to live next to a power plant.
When considering a project, the OPSB considers a variety of factors including the environmental impact, potential alternatives, regional utility planning, the impact on agricultural land and if the facility will serve the public interest, convenience and necessity.
Boggs said that based on how solar power is generated, the question of whether the facility will serve the public interest, convenience and necessity is “probably often where there is room for people to make arguments.”
He said the process has very specific guidelines and timelines, but there is no set timeline for the actual decision to be made.
In 2020, Invenergy and Acciona Energy each applied to construct solar energy projects in the northern part of the county.
The Acciona Energy project, named Union Solar, is a planned 25-megawatt solar powered electric generating facility on about 3,500 acres near the intersection of Routes 31 and 739 in York and Washington townships. Construction of that facility is set to begin in the first quarter of 2022. Acciona officials said it could be scheduled to be in service by the first quarter of 2023.
Invenergy’s proposed project, Cadence Solar Energy Center, is a 275-megawatt solar-powered electric generation facility. The company already has about 5,100 acres under lease in Union County.
The majority of the land is south of Route 47, between Yearsly and Storms roads and north of Route 347. Officials said they expect to begin construction in the first quarter of 2022, expect to be online operational and generating power by the end of 2023.
At least two other solar projects have expressed interest in locating in Union County but have not formally applied with the OPSB.