>La Grande Observer | Union and Wallowa Counties' News Leader

Wind turbines like these could soon grace Union County landscapes. (File photo).

Bill Rautenstrauch

Staff Writer

Tax incentives for green power businesses are blowing into Union County on the wind.

Last month, the three-member Board of Commissioners passed a resolution sponsoring a county-wide Rural Renewable Energy Development Zone.

If the designation is approved by the Oregon Economic and Community Development Department, it could mean significant tax breaks for businesses wanting to build wind farms here — and significant gains for the local

economy.

"We could offer an exemption on $100 million for three years," said County Commissioner John Lamoreau. "It's definitely win-win. We get the investment, and after the property's developed, we get the full tax rate."

The development zone designation is intended to help communities attract businesses, create jobs and generate revenue for taxing districts, said Lamoreau.

It would allow the county to offer a three-year exemption on property worth up to $100 million.

Lamoreau believes it's an incentive that could help Union County become an important player in wind power development.

He said the tax break would make it easier for companies to meet other expenses, including "wheeling charges" paid to send power out of the county on other companies' lines.

"It's a very competitive world, and the purchase agreements go to the people who can offer the lower price," Lamoreau said.

Union County, the first to apply for the designation, is thought to be one of the most promising areas for wind energy development in the Pacific Northwest.

At present, Horizon Wind Energy — known until recently as Zilkha Renewable Energy— is the only firm looking to capitalize on Union County's wind.

A couple of other companies have shown interest, though none have applied for permits, said Lamoreau.

"I have been contacted by two other companies who are exploring what resources are available," Lamoreau said. "They are looking at the Elgin area."

Horizon's proposed Elkhorn Wind Power Project near Telocaset in southern Union County has qualified for tax incentives under Oregon's Strategic Investment Program.

The Elkhorn project will not qualify for the development zone tax incentives — should Union County gain the designation.

The Elkhorn development is priced at $100 million. Under the Strategic Investment Program, first-year assessed value greater than $25 million is exempt from property taxes.

But the county picks up community service fees paid each year to local service providers.

Lamoreau said first-year taxes on the Elkhorn project will amount to about $288,000. The project also will generate $410,00 in community service fees, he said.

"No matter how you look at it, it's a significant project. When was the last time you heard about anybody coming into the county with even a $25 million development?" Lamoreau said.

The county stands to collect more than $7 million over the 15-year life of the Elkhorn project, according to Lamoreau's estimates.

Though the development zone designation won't help Horizon on the current project, it may factor in later.

Lamoreau said the designation would be important for additional projects developed in Union County by Horizon, or those that may be developed by someone else.

There is a $100 million limitation on development zone property tax exemption. The county could seek an additional designation that would authorize another $100 million.

The Elkhorn Project, announced in June, remains on hold as Horizon seeks a buyer for the power.

In June, Project Manager Hilary Foote said the company hopes to start construction late this year or early in 2006.

Above and beyond tax revenue, most observers agree the Elkhorn development represents a bonanza for the county.

About 200 workers would be involved in construction. When finished, the project would provide 8-15 family wage jobs, according to Foote.

Landowners leasing the space for up to 70 turbines could share in as much as $300,000 per year in royalties, she said.

Earlier this year, Horizon was granted the necessary county permits to build the facility.