Cloud County Commission Discusses Road Use & Maintenance Agreement for Wind Farm Project

The Cloud County Commission met on Monday, May 23rd with Andy Asch, Highway Administrator, and Tanner Yost with Kirkham Michael to discuss a possible Road Use & Maintenance Agreement for the planned Plum Nellie Wind Farm project.

In February 2022, the Cloud County Commission unanimously approved a Payment in Lieu of Taxes (PILOT) Agreement with EDP Renewables North America for the Plum Nellie Wind Farm, which will border EDP Renewables' existing Meridian Way Wind Farm on the west side and stretch east to the Clay County line and south of US Highway 24.  Once built, the wind farm will include 45 to 50 wind turbines over approximately 20,000 acres in Cloud County, and will have a maximum generating capacity of 200 megawatts.

Under terms of the PILOT plan, EDP Renewables agrees to voluntarily make ten PILOT payments of $300,000 a year, or $1,500 per megawatt, to Cloud County while the project receives a property tax exemption for the first ten years of the project's life.  The first PILOT payment will be made during the first calendar year after the project is completed and has commenced commercial operation.  Additional PILOT payments will be made on or before December 31st of each of the succeeding nine full calendar years.

In 2015, the Kansas Legislature repealed the lifetime property tax exemption for renewable energy projects, and replaced it with a 10 year exemption, consistent with other forms of electricity generation.  As a result, the property tax obligations of renewable energy projects are significantly higher over the life of a project than under the lifetime exemption.

For the proposed Plum Nellie Wind Farm, in year 11 and beyond, preliminary property tax payments to the county are estimated at $1.9 million.  Over the course of the 30 year expected life of the wind farm, the project would bring over $36 million in gift and tax revenue to the county.

All land needed for wind turbines, roads, underground collection cable, the overhead generator lead line, and collection and interconnection substations has been secured under long term lease or agreement.  The project likely has the potential for construction in 2024.  Commercial discussions are ongoing with potential electricity customers, but at present, no power purchase agreement has been announced.

The PILOT agreement states the county may direct payments to any general county fund or specific fund or funds established by the county.  The county is under no obligation to EDP Renewables to distribute the payments in the same manner as taxes are distributed.

At an appropriate time, EDP Renewables will also seek to work with Cloud County on a Road Use & Maintenance Agreement for the use of county roads.

Yost is a Professional Engineer with Kirkham Michael, a multi-disciplined civil engineering firm dedicated to providing full-service engineering from concept to final design and construction engineering services.  Yost spoke to the commissioners about what to expect during construction and why a Road Use & Maintenance Agreement is needed to protect county roads and structures.

Yost said the agreement should contain a pre-construction inspection, inspection during construction, and a post-construction inspection.

Yost indicated the pre-construction inspection should include videos of haul routes within the project area, photographs of road conditions, photographs of hydraulic structures, load analysis of structures, and core samples along paved roads.  An inspection during construction should monitor wind farm activity and road conditions, monitor right-of-way permit requirements, and deal with landowner/township road complaints.  The post-construction inspection should involve photographs of road conditions, photographs of structures/pipes, a comparison of pre- and post-construction photos, and identifying damage costs.

Yost said it's important the agreement outlines the wind farm is responsible for turning the county roads back to pre-existing conditions or better at the end of the project.