The Sullivan County Council voted 4-3 to approve a 10-year tax abatement request for a proposed $10-million solar project during their meeting Tuesday.
Duke Energy signed a 20-year agreement with Sullivan Solar LLC in December, which plans to build a five-megawatt solar farm on the west side of U.S. 41, just north of CR 300N. The project’s developer is Boulder, Colo.-based juwi solar Inc.
Construction on the project will last 12 weeks, with a planned start date of July 15. According to the agreement signed with Duke Energy, the site must be fully online by March 2016. Sixty construction jobs would be required, paying about $31 in hourly wages.
The latter was a sticking point in the request to the council as a guarantee of local union labor being utilized created the most discussion in the approximately one-hour public hearing.
“Are you going to ensure us that you’re going to use local unions?” a union representative asked.
“That is our plan in the memorandum of understanding,” juwi Business Development Associate Adrian Anderson said. “Assuming everyone has the skills we need and we can get it locally. On all of our projects, we’ve hired all locally … it just works out better that way.
“There is no circumstance where we haven’t hired local labor,” Anderson continued. “If the bids are competitive and the guys are qualified, we’ll use them. Again, I just can’t commit 100 percent. I’ve never seen your guys work. I don’t know what they do. If your guys are awesome, we’ll use them.”
Voting for the abatement were Duane Wampler, Rick Walters, Jim Stricklin and Jerry Payne — the latter two making the motion and second, respectively.
The three councilmen voting nay — Larry Cox, Bill Pirtle and Max Judson — all wanted assurances of local labor usage.
Another concern raised was what happens to the tax abatement money if Sullivan Solar LLC is not around for the 10-year period.
“We’re making a 20-year commitment, because to provide the energy, we need to keep the equipment there,” Sullivan Solar LLC attorney Mary Solada said. “According to the memorandum of understanding, they will pay back the abatement if they leave in less than 10 years.”
Solada described it as a “traditional” abatement, the first year is 100-percent abated, then declines to 90 percent, 80 percent, etc. over its 10-year life.
Sullivan County Republican chairman Bill Springer stated a similar project in Clay counties, which is already underway, has not requested a tax abatement.
“Indiana law allows an abatement after the fact, if the county council chooses to do so,” Solada stated. “A year from now, they could come in and seek an abatement. We have to have this abatement for this project to pencil out.”
Springer also raised concerns of the impact on the county’s coal miners due to this project, saying this might cause displacement of jobs.
“My dad was a coal miner since he was 11 years old, so I have sympathy (about displacing),” Walters said. “But, talking to the people at Hoosier Energy, they say they produce 1,000 megawatts of power a day when they are up and running full blast. With five megawatts (produced by Sullivan Solar LLC), that’s a small dent in what Hoosier Energy does.”
“Just a hiccup,” Anderson agreed.
Also discussed was impact on tax revenue due to depreciation.
Terre Haute attorney Lou Britton, who has advised the council on the abatement process, noted state law requires a depreciation floor of 30 percent.