Jenn Miller, CEO of Renewable Independent Power Producers, LLCis familiar with energy generation. Her company completed the Willow Solar Farm Pilot Project and Expansion, currently the largest solar farm in the state, and plans to construct a larger farm in Houston next year.
The proposed Kenai Peninsula farm would be Renewable IPP's most ambitious project to date. Speaking to the Borough Assembly last Tuesday, Miller said the farm, "would have a rated output of 20 Megawatts; the project would produce enough energy for about 4500 homes and would meet 6.5% of Homer Electric’s Energy demands. So it’s really significant.”
Her company operates a for-profit model as an independent power producer, which is a private entity that owns a generation facility and sells electricity at wholesale prices to a public utility. "The intent," says Miller, "is that the private industry owns the asset and it brings in competitive pricing to a public utility. You have your generation site and we just tie into the existing grid system. Sometimes we have to pay to upgrade them, but we tie in and then the utility distributes that electricity to their customers.”
Miller noted that the distinction is important.
"We are talking about really expensive capital assets once we do the improvements and so it’s about 30-35 million infrastructure project. And a lot of times infrastructure projects are funded by the government or a utility co-op, but this is private industry. Property taxes would be about 15 percent of our annual revenue. So, it just amounts to a large tax and a burden on the project. And ultimately what that does is that it inhibits our ability to offer the lowest possible electricity costs to HEA members."
Miller says that while the project would not need to be exempt from property taxes on the proposed 160 acre parcel, she hopes for an 80 percent tax exemption on capital improvements. Outgoing Assembly member Willie Dunn pointed out that the Borough typically provides a 50 percent property tax exemption to new industries coming into the Borough that fit certain guidelines.
While the assembly members asked questions about the implications and details of the renewable energy project and generally expressed optimism, Kenai Peninsula Borough Mayor Charlie Pierce, who worked for 26 years in the oil and gas industry, was skeptical about the Borough providing a tax exemption.
"If we have to subsidize it in order to do it, why should we do it? I liked your program all the way until you’re asking for some tax exemption for your project," said Pierce.
Miller responded, noting that subsidies for large scale energy projects are common.
“What I’ve found is that the US government as a whole subsidizes energy by giving projects those subsidies; it results in lower cost energy that helps our economies thrive. The heart of the question is: if we get this exemption for this project, how does it benefit the Borough residents? If we come in 4/10 of a penny below the current cost of generation, we would equal what we paid in property taxes. And those dollars are going directly to the residents.”
Miller and her team plan to meet with the Kenai Peninsula Economic Development District to further discuss the proposed project. In addition, the Resilience and Security Advisory Commission will conduct an independent analysis of the project with a report expected in November or December.
