A proposed solar development north of Dillon could bring an estimated $19 million in taxes over 35 years to Beaverhead County and as much as $1.29 million for a period of time to the state trust, according to the Department of Natural Resources and Conservation.
The Department of Natural Resource and Conservation is hosting a public meeting to discuss the proposed commercial lease on state trust land. (See information box.) The company, Clenera LLC, a Boise-based solar-energy firm, would build a 160-megawatt solar-panel facility on 1,306 acres of leased state land. The project would be the largest commercial solar project in the state if it goes through, said Mike Atwood, DNRC real estate management bureau chief. The meeting Wednesday is the first step in that public process.
Mike McGinley, Beaverhead County Commissioner, said the way the taxes would work it wouldn’t necessarily be a $19 million windfall for the county but it could cause county residents’ taxes to go down.
The project would take place about ten miles north of Dillon off Interstate 15. About $10 million in taxes would be generated in the first 15 years by the project, according to the DNRC. The lease to Clenera, if it gets through the approval process, will create an annual lease fee of $480,000 for the first 15 years to go to the state trust.
There would also be a one-time installation fee of $320,000; $41,202 for three years for an annual option fee; and $450,000 bonus payments paid in the first 15 years.
The annual lease would then go up to $520,000 by year 16. All of the money goes to the state trust, which provides money to the schools and other endowed institutions.
The project is also expected to bring anywhere from 300 to 400 jobs during construction, said Jared McKee, Clenera’s director of business development.
Atwood said the project would bring a small number of permanent jobs once construction is over but McKee said the company isn’t ready yet to release that number.
If all goes well, the project would take around a year to construct and would happen in either 2020 or 2021, McKee said. There will be infrastructure, which would include both a substation and a switching station that will have to be built at the site, McKee said.
The land is currently being leased by two different ranching families, the Marchesseaus and the Hagenbarths. Romeo Marchesseau said his family is “totally opposed” to the project.
“That is actually part of our livelihood,” Marchesseau said. “We use it in summer to graze on. It’s an integral part of our operation and has been for 50-some years. It’s something we’re totally opposed to.”
Marchesseau said his family is trying to start a grassroots campaign to stop the project.
Jim Hagenbarth said he will lose about $4,000 a year if he can no longer lease for cattle on that land.
“We can’t compete in the market to replace that land because of the high value of land. We can’t pay for it through production and livestock,” Hagenbarth said.
But he recognizes the financial benefit to the state.
“It’s more than the state gets through grazing,” Hagenbarth said of the projected annual lease fee.
The land brought $2,430 in revenue through grazing leases in fiscal year 2018, according to the DNRC.
Atwood said this particular parcel is assigned to Pine Hills Correctional Facility in Miles City, so all of the state trust money gained from the project would go to that particular institution. Amy Barton, spokesperson for the Department of Corrections, said Pine Hills holds both male adults and male juveniles and has an annual budget of $9.3 million.
While Hagenbarth recognizes the benefit to the state, he has concerns about the project.
His family has put up fencing around the state land and he doesn’t know yet if his ranch will be reimbursed for that cost.
Hagenbarth, who has held the grazing lease on that land for decades, said he worries that his own parcel of 79 acres adjacent to the state land would become devalued by the solar project. He’s concerned about Clenera being good stewards of the property and if, for some reason, the company goes belly up, he wonders if the company will be bonded so the panels could be removed and the land restored to what it was. Hagenbarth and Marchesseau both worry about the loss of recreation on the land. There can be no hunting on a solar farm, says the DNRC.
“It’s open now, you can go hunt antelope there,” Atwood said. “The antelope will adjust, but it’s a loss of recreation for hunting. No firearms are going off in there.”
There’s also an intrinsic loss for Hagenbarth if the project goes through.
“Our families support working landscapes,” Hagenbarth said. “Solar power is one of the energy sources that’s all-consuming to a piece of ground.”
McKee said the company will be interconnecting with NorthWestern Energy’s lines, if the project becomes a reality. McKee said that Clenera’s plan is to sell the solar energy so it becomes a part of the energy source for Montana customers. Whether NorthWestern Energy becomes the customer, McKee couldn’t say at this stage.
But, he said, he thinks Montana is ready for solar power.
“We believe (Montana) is a market where solar can make a difference. It’s a clean option that comes at a low cost,” he said.
He also said that Dillon gets plenty of sunshine.
“As far as the Pacific Northwest goes, Dillon is a good place to be,” McKee said.
McKee said solar receives a 30% federal tax credit based on the level of investment into the project but does not receive federal subsidies.
Jo Dee Black, spokesperson for NorthWestern Energy, said NWE doesn’t have a position on the project. She said NWE is establishing what its costs would be.
She said the solar energy would be a network resource for NWE if the two companies can come to terms.
“It would be used for NorthWestern Energy’s Montana customers,” she said.
The DNRC says the land is boarded by an irrigation ditch, a ranch to the west, Birch Creek county road and Interstate 15, as well as an active gravel pit and one rural subdivision with a single homeowner.
“It’s a substantial amount (of money) for this piece of ground,” Atwood said. “It’s marginal grazing land. It’s considerably more money than grazing brings.”
Hagenbarth concedes he may not have much of a choice in the matter. After the open house meeting Wednesday in Dillon, the Land Board will take up the issue in the coming months and will vote to approve or vote down the proposal.
“The state land board is obligated by law to generate the most income from the leases,” Atwood said.