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National Association of Counties
Washington, D.C.

www.NACo.org

 Counties welcome renewable energy development but regret its costs

By Charles Taylor
SENIOR STAFF WRITER


 

Photo-Solar.pngImage courtesy of BrightSource Energy
A rendering of the Hidden Hills Solar Electric Generating System planned for Inyo County, Calif., shows a field of “heliostat” mirrors that will focus the sun’s energy on two 750-feet towers. The concentrated heat will create steam to run turbines that generate electricity.

 

California has embraced renewable energy with a Golden State bear hug. Wind, geothermal and solar power have brought the promise of jobs, revenue and clean energy to many of the state’s counties, including several north and east of Los Angeles — and cheaper electricity for the state.

But increasingly, some of those counties are discovering it’s not all sunshine and kilowatts. For all solar’s benefits, some counties worry that costs might outweigh benefits to the local economy, especially for large, utility-scale solar installations.

In Inyo County, BrightSource Energy is planning to build the Hidden Hills Solar Electric Generation System, a 500-megawatt solar-thermal power plant on a 5.1-square-mile site near the Nevada border. Construction is expected to begin sometime this year and be completed in 2015.

Kevin Carunchio, the county’s chief administrative officer, says the county is solidly “pro-industry, pro-resource and pro-private property” and in favor of the $3.7 billion project. But Inyo finds itself challenged to make the project pay off — or simply breakeven — for the county.

“We support these projects,” he said. “Ideally we like to see some economic benefits in the county, but at the very least, our concerns with Hidden Hills are we can’t afford to have these projects cost our county money in terms of program and service demands.” San Bernardino and Riverside counties have the same concerns about projects in their jurisdictions.

The problem for counties is that California law exempts “certain active solar energy systems” from property reassessment. Many rural counties already have small tax bases, largely because much of their land is owned by the federal government or the state.

In Inyo County, 92 percent of the land is owned by the federal government and only 1.7 percent is privately owned. In a company fact sheet, BrightSource projects Hidden Hills will spur:

  • 2,300 construction jobs over a two-year period, and about 100 permanent jobs once operational,
  • $550 million in wages in its first 25 years of operation, and
  • $290 billion in local and state taxes over the period.

However, a socio-economic study commissioned by the county disagrees with estimates by BrightSource and the California Energy Commission on cost-impacts to the county. The county estimates the project would generate less than $1.2 million in property taxes per year while costing the county $1.7 million to provide services such as law enforcement, road repair and water monitoring. BrightSource estimates it will pay $3.9 million in property taxes.

The project is closer to Pahrump, Nev. (18 miles) and Las Vegas (45 miles) than to Independence, the Inyo County seat, which is about 250 miles away. So, county officials are also concerned that project employees would live and spend their money in Nevada.

Carunchio said he’ll be happy with however many “living-wage jobs” Hidden Hills creates, with a caveat. “We’re very concerned that this will cost us money. The downside to the county right now is looking much more like $50 million over the life of the project, so that’s a big concern,” he said.

Last November, Inyo and Riverside counties, and the California State Association of Counties (CSAC), appealed to the state energy commission to remove solar power plants from the property tax exclusion. The commission declined.

“Folks aren’t anti-solar,” said Jean Hurst, a CSAC lobbyist who specializes in taxation and revenue issues. “I think they’re just looking for a little more level playing field in terms of the needs of the local community as well, and that’s not what we’re seeing.”

In Riverside County, two utility-scale solar generating stations that will occupy 6,000 acres are currently under construction, and more are in the queue. Gerry Newcombe is the county’s director of public works. Also of concern, he said, are environmental mitigation requirements that can be associated with big solar projects.

Companies can be required by the state to mitigate lost habitat at ratios of two-, three- or four-to-one, which can require the purchase of “big tracts of private land,” effectively removing them from revenue-generating uses.

“Our concern is, frankly, if all the projects we’ve been hearing about come to fruition, there isn’t enough privately held decent habitat left in the Mojave Desert to mitigate them all,” Newcombe said.

In neighboring Kern County, renewable energy hasn’t all been more cost than benefit, but that’s because most of the development there has been wind energy, according to Lorelei Oviatt, the county’s planning director. “It’s been a tremendous boon to us both financially and in regards to jobs over the last two years.” Kern County has permitted more than 7,000 megawatts of renewable energy over the past four years, she said, the vast majority of it wind.

But Oviatt is not unsympathetic to her neighbors’ solar plight. “This is a function of the Legislature making a decision that incentivized one industry (solar) without consulting the counties.

“There was no thought given to this,” she added. “And I think that the backlash you’re seeing is a legitimate backlash by the counties that are dependent on property tax revenues.”