Power plant could still get OK to generate electricity

Plans to build a $300 million power plant in the Ligurta area are still under way, at least for now, an official with a local irrigation district involved with the construction said.

"I don't think the district would waste anymore time on the project if we thought it was absolutely impossible to get this done," said Charles Slocum, general manager for the Wellton-Mohawk Irrigation and Drainage District. "The fact that we are still involved in the process indicates that we have expectations, but it's a slow and careful process."

Selling electricity generated at the plant, Slocum said, is the biggest single factor affecting its viability.

"If we (the developers) knew whether or not we were going to be getting a successful contract with someone to buy the power, then probably it will be built," Slocum said.

According to Slocum, the developers are in a Catch-22 situation. He said having secure buyers for the plant's power would make it easier to get the necessary financing to construct it, yet buyers don't want to purchase power from a plant that hasn't been built yet.

"So it's the chicken or the egg scenario," Slocum said.

The huge 520-megawatt plant, fueled by natural gas and supplemented by solar energy, would primarily supply electricity to irrigation districts throughout the state under long-term contracts. Additional energy would be sold to merchant power markets.

Originally expected to be in commercial operation by June 2003, with a build time of 18 to 24 months, the plant is behind schedule.

If built, however, the plant will be the largest privately funded project ever to be built in Yuma County, creating 300 long-term jobs while under construction and employing 25 to 30 permanently once in operation, the county has said.

In the most recent developments, a special use permit application to build the co-generation plant is up for final approval by the Yuma County Planning and Zoning Commission at 6:30 p.m. Monday in the Board of Supervisors Auditorium at 198 S. Main St.

On Tuesday, the county's Board of Adjustment recommended approving a variance for the height of the plant's exhaust stacks.

Pending the commission's action, the requests will be heard by the Board of Supervisors at public hearing during its May 5 meeting at 1:30 p.m. at 198 S. Main St.

In what is an extremely complex process, according to Slocum, the plant is also waiting for the state to render a decision on its certificate of environmental capability and the completion of a federal environmental impact study.

"All of these things have to happen concurrently because if you wait and do them sequentially, it would drag the process out forever, so you have to have a lot of ongoing processes and clearances going on at the same time," Slocum said. "You can't imagine how many hoops and hurdles there are to jump through."

The plant is being developed as a joint venture of Primesouth, a subsidiary of South Carolina Gas; WMIDD; Yuma County Water-Users Association; and Jasper Energy, formerly York Research.

At most, Slocum said WMIDD would only own about 10 percent equity in the plant, and possibly none at all.

"There are a lot of questions that have to be answered about what is the safest role for the district to play relative to its water and integrity," Slocum said.

The Yuma County Water Users Association will also utilize a small portion of the plant's electrical generation.

One issue still to be resolved concerns the plant's tax status.

Fearing a loss of more than $2.3 million to the county's tax base in the plant's first full year of operation, the Yuma County Board of Supervisors sent a letter last September to the Arizona Corporation Commission's Power and Line Sighting Committee requesting the plant pay property taxes commensurate with its value or equivalent payments in lieu of taxes to all taxing entities with jurisdiction over the plant.

The four entities involved in the plant's construction have formed the Dome Valley Energy Partnership and intend to organize as a limited liability corporation, which would make the plant partially tax exempt from property taxation.

While the county still wants the plant built, it doesn't want that to happen.

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James Gilbert can be reached at jgilbert@yumasun.com or 539-6854.