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Inyo, BrightSource at odds over mitigation estimates

December 19, 2012

This rendering of the Hidden Hills Solar project proposed for Southeast Inyo shows one of two power towers that will be constructed at the site. Local officials fear a project of this magnitude will negatively impact county services. Image courtesy California Energy Commission

County leaders said last week that they support a proposal for a large solar energy plant in southeast Inyo County, but only if the project proponent can guarantee that it won’t cost the county.
BrightSource Energy is proposing to build two 250-megawatt solar thermal power plants on a 5.1 square-mile site in the area north of Old Spanish Trail Highway, just west of the Nevada border in Charleston View.
All five members of the Board of Supervisors have said they support the location of the proposed solar plant, but expressed concerns that construction of the project would increase traffic on Old Spanish Trail Highway, shortening the life of the road, and that the solar plant would increase the population in the remote area, creating challenges for law enforcement.
For more than a year, county staff and staff from BrightSource have been working on an agreement that would require BrightSource to provide Inyo County money to mitigate any negative impacts to the county.
Because it is a renewable energy plant, the state says that the Hidden Hill Project is largely excluded from having to pay property taxes, which would generally be used to mitigate impacts to county services.
Last week, the Board of Supervisors voted to endorse a sales tax agreement that would have BrightSource pay the county $7.8 million in sales and use taxes and would allow the county to request additional funds from the company to mitigate any unforeseen impacts its $2.6 billion solar project might create during its 30-month construction period and 25-year lifespan.
Representatives from BrightSource rejected the county’s proposal, saying the local leaders overshot its estimates on impacts the project would create.
BrightSource proposed an agreement that would provide the county $8.8 million in sales and use taxes to be used for impact mitigation. That proposal included a clause that would prevent the county from making additional claims for mitigation of socioeconomic impacts related to the project.
County staff estimated county departments would need about $11 million for additional staff and services during the project’s construction phase, and $1.7 million a year in ongoing costs. The California Energy Commission’s consultants, the Aspen Group, estimated that the county’s costs during construction would be $2.8 million, with yearly, ongoing costs of $390,000.
If the county and BrightSource cannot reach an agreement on the specifics of the sales tax issue, the CEC, which has sole jurisdiction over the permitting and approval of the plant, and also makes the final judgments regarding all mitigation issues, will determine the amount and timing of the sales tax payment and any other mitigation payments BrightSource must make to the county.
“Somebody is way off, here,” said Third District Supervisor Rick Pucci regarding the two financial estimates the board was reviewing. “That huge discrepancy bothers me.”
The Californian Energy Commission estimated that the county would end up taking in about $30 million more than it spent to provide government services to the Hidden Hills project over the next 28 years. The county’s consultants estimated the county would have higher costs and not receive the revenues estimated by the CEC, thus the county could be forced to pay about $21 million out of the General Fund over 28 years to cover its costs related to the facility.
The Board of Supervisors was not comfortable accepting the CEC’s financial analysis, and instead endorsed the higher cost estimates provided by county departments heads, who each evaluated what they assume will be the impacts created by the project.
First District Supervisor Linda Arcularius said that, as a county representative, her faith lies with county staff and the recommendations they made.
The county has to have assurances that the company will “mitigate its negative impacts,” said Pucci. “We can’t gamble” that the CEC figures will be right.
If BrightSource is so confident about the projected revenues that would flow to the county, “guarantee them” in writing, suggested Second District Supervisor Susan Cash.
The county and its taxpayers “should not be burdened by BrightSource” and its project, said Fifth District Supervisor Richard Cervantes. There are going to be impacts, and the “county should be kept whole” by having the company pay for its impacts.
BrightSource Vice President Chris Moore said the county overshot its estimate on both the Old Spanish Trail Highway cost and Sheriff Bill Lutze’s assertion that he will need seven new deputies to have adequate resources near the construction site.
Moore said most of the construction materials for the project will be routed through Nevada, and use a small stretch of Old Spanish Trail.
He also said that most employees working on the project will be housed east of the California border, and two new deputies with the Sheriff’s Department should provide adequate service to the area.
Without an agreement on the sales tax proposals, Inyo County is hopeful the CEC will make payment of sales and use tax to Inyo County part of the project’s conditions of approval. But the timing and amount of the payments will be determined by the CEC. The county will also continue to work with BrightSource and the CEC to reach some agreement on other outstanding mitigation issues.

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