Solar developer eyeing new solar farm locations, intends to seek tax abatement

Wednesday, June 24, 2020

A developer is taking another crack at creating a solar project in the Dillon area, and will seek a tax abatement as part of that process.

Boise, Idaho-based Clenera LLC originally proposed creating the 1,308-acre Apex Solar farm on Birch Creek Road. The company is now working on a different solar proposal on Ten Mile Road about five miles west of Dillon. Clenera was granted an option to lease the Birch Creek site by the Montana State Board of Land Commissioners (Land Board), but withdrew the option in October 2019. The lease reverted to the prior leaseholder at that point.

The new solar farm proposal is for two 80-megawatt facilities on approximately 500 acres of land for each, and would be located at 5705 Ten Mile Road on private land, Clenera Director of Business Development Lars Dorr said. The two new facilities would be called Rattlesnake Solar and Upland Dillon Argenta Solar, near the Northwestern Energy utility site on Ten Mile Road.

For the new projects, Clenera proposes seeking a 25 percent abatement on the taxable value of the projects, for each of the first five years of the development. The assessment would ramp up to 100 percent of taxable value starting at year 10.

Dorr discussed Clenera’s proposal with the Beaverhead County Commissioners Monday. He said the company took into account the public pushback over the Birch Creek solar facility, and selected another location option. The company explored multiple options for a solar location in the area, and selected a new site with fewer downsides for the public.

“We always have fallback options – we don’t want to put all our eggs in one basket. We’re in the business to develop solar and looking at markets where it’s possible,” he said. “Ultimately, we want to have successful projects.”

The proposed tax abatement mirrors one granted for a solar facility in Fallon County, Dorr said. Clenera projects the county would receive $6.8 million in tax income from both plants for the first 10 years with the abatement, and $19.6 million total for both over the 40-year life of the project. The state of Montana would receive $3.4 million in the first 10 years with the abatement, and $6.2 million over the 40-year term.

“I think a big thing of what we are looking for is the county’s support in signing a resolution – it’s part of the tax abatement process,” Dorr said. “This helps enable the project to be economically viable.”

Clenera officials estimate there will be 350 construction jobs created to build the solar facilities, though Dorr said they predict only two- to four long-term permanent positions for maintenance of the facilities.

Commissioner Mike McGinley said he is wary of supporting a tax abatement, largely because of the lower tax “class” it would fall under and the few jobs created.

“Other than the taxable value (of the project), there is no other benefit for Beaverhead County. You take any other industry – pick Pfizer, pick Rocky Mountain Supply – they probably pay the same amount of taxes, but they employ a bunch of people that buy houses and everything else, and pay taxes. That’s how we get a benefit,” he said. “I would be all over this if this guy had 20 paying jobs that he was putting together. But with nothing, I struggle with it.”

The next step is for Clenera to apply to the Montana Department of Revenue, and then hold a public hearing with the commission, Dorr said. Dorr said he would like to see the county issue a resolution supporting the abatement by the end of August.

Clenera is also working to finalize a Power Purchase Agreement with NorthWestern Energy, which is currently being argued at the Montana Public Service Commission. A decision on that agreement is due by Sept. 30, 2020; the deadline was pushed back due to the coronavirus pandemic.