A solar energy company is garnering public support for a large-scale project on Pierce Ranch that will have a significantly positive economic impact on both Wharton County and Wharton Independent School District (WISD). AP Solar Holdings LLC Development Director Lisa Murphy sat down with The County Gin to discuss the proposed energy producing plat and the abatement agreement needed to secure the success of the project.
“The 350 megawatt large-scale solar project is scheduled to break ground on a 3,000-acre tract of Pierce Ranch in the first quarter of 2021 and be fully operational by the summer of 2022,” Murphy told The County Gin. “This project site was selected because it’s a lot of land, it’s on a transmission line that’s capable of carrying the load from our project and it’s good solar radiation.”
When operational, she added, Red-Tailed Hawk Solar will provide enough low-cost electricity to power approximately 65,000 homes in Texas.
The project is seeking a Chapter 312 Property Tax Abatement agreement with Wharton County, which would defer taxes on the project for 10 years; however, the lump sum payment at the end of the abatement period would not qualify for exemptions or any further discounts.
Murphy approached the Wharton County Commissioners Court initially in April of 2019 and returned with a revised application, asking for less abatement in August of 2019.
“They’ve agreed only to accept our application. We have not gotten to the point of negotiating an agreement,” Murphy told The Gin. “We provided a draft agreement because we expect to pay for the cost of the project so that it doesn’t go to the county, but there’s a reluctance.”
The development director speculates that there was negative press regarding renewable energy and it has hindered the county’s interest in providing an abatement agreement.
“The group was opposed to wind and solar got lumped into it as a renewable energy source. The reason why Texas has such affordable, reliable energy is because we use the all-of-the-above method of energy. I really don’t understand the commissioners’ reluctance except for their concern about taking agricultural land out of use. However, it’s managed so that there’s a lot of agricultural use on (Pierce Ranch) and we’re only using a percentage of it,” Murphy said, noting three important facts regarding agricultural use on Pierce Ranch: once the solar plant on the Pierce Ranch is retired, the land can be converted back to agricultural purposes; no producer on Pierce Ranch has lost or will lose his traditional share of productive farmland acreage as a result of Red-tailed Hawk Solar; and the retirement of a farmer allowed land to be re-allocated among the remaining farmers, resulting in no net loss of farmed acreage, therefore, the ranch will experience no loss of production due to this project.
“I’ve never talked to anyone who wasn’t a proponent of the project because of the benefits to the school district and to the county. Solar is a good neighbor.”
In fact, the economic benefits to both Wharton County and the WISD would be substantial long after construction.
“I’m hoping people will be interested enough to look at the economic impacts because it’s really significant,” Murphy said. When she first approached former WISD Superintendent Tina Herrington about the project, “she was so enthusiastic about it and the district is a such good advocate,” Murphy said.
A Texas Code Chapter 313 agreement with WISD would give the district an alternative revenue source in the form of a pilot payment — a payment in lieu of taxes “over and above what they would normally get,” Murphy explained. “Those are the funds that pay for new infrastructure.” This agreement was granted by the WISD Board of Trustees.
Further, the project would bring more than $1.4 million for the county and $7 million for WISD. Over the first 10 years during the requested abatement period, it will yield $13 million in total county tax revenues and $16 million for the school district. Over 30 years, the revenue will be $31 million for the county and $38 million for WISD, Murphy said, noting, “That’s significant.”
In addition to the tax revenues, the county will benefit from the more than 300 jobs created during the two-year construction period. This generates sales tax receipts on building materials, as well as indirect revenues for the hotel and food service industries. During operation, Red-Tailed Hawk Solar will sustain three full-time positions.
However, the project will not be possible without the abatement agreements.
“The rate of return for these projects is super low, even with tax abatements. If we can get some help in those first few years, it ensures the project can go forward. So, we really need a 312 agreement to help the sponsors get the right rate of return to provide the money to build (the project),” Murphy told The Gin. “If we don’t get a 312, it endangers the money coming to the school district and the county.”
The County Gin reached out to Wharton County Judge Phillip Spenrath and while he could not comment on the Red-Tailed Hawk Solar Project specifically, he stated, “Solar projects are definitely win-wins for school districts. The county is always looking for opportunities to lessen the tax burden on local home owners. We understand the struggles of local taxpayers and have not taken on any debt service in the past 10 years.”
He encouraged The County Gin to contact Pct. 3 Commissioner Steven Goetsch, who did not reply to a request for comment.
Murphy is optimistic, however, saying she does plan to approach the commissioners court again in the future after first educating the community about the benefits of the project.
“I want to wait until I know the community understands what we’re doing and the benefits before we come back to commissioners,” she said. “I’m just waiting to hear we will be successful.”
To learn how you can contact your Wharton County commissioners to express your support of a 312 tax abatement agreement for this project or for more information, visit www.redtailedhawksolar.com.