The City of Rushford Village is considering the option of an extended land lease to MiEnergy/OneEnergy for the purpose of a large scale solar array project. The project has two options. One is to construct a ground-mount solar array entirely on existing MiEnergy land. The other is allowance of a 26-year land lease for 3.17 acres of Village property for the construction of a tracking, ground-mount solar array system. Kent Whitcomb, MiEnergy Director of Member Services, and Eric Udelhofen, OneEnergy Renewables Director of Project Development, were on hand at the December 17 hearings to answer questions.
According to Whitcomb, wholesale power provider Dairyland Power has a policy allowing cooperatives to own up to 10% of its own peak load or to have the option to purchase the equivalent elsewhere. MiEnergy is consulting with OneEnergy, a renewable energy firm out of Madison, Wis., and has identified several suitable sites for an array. The Rushford site is particularly attractive as it provides enough area for tracking units, which are 17-18% more efficient than fixed panels.
It was noted the benefit to Village taxpayers would be a reduction in cost of wholesale energy and transmission costs. However, this cost would be a savings to all MiEnergy members, not through any credit specifically to those within the Village.
The council had a few areas of concern, including maintenance and decommissioning of the array if the need arises. Whitcomb noted the materials are typically warrantied 20-25 years and that he doesn’t see costs related to maintenance as an issue. In addition, the lease agreement obligates project owner (OneEnergy) to remove any equipment within six months if it ceases paying land rent or at end of term. Furthermore, it must show sufficient funds set aside to cover decommissioning.
“The first ten years there’s enough value in the equipment to more than compensate for any removal. A bond goes into effect at a certain point as salvage value drop,” added Udelhofen. The panel equipment was noted as just 25% of the overall cost. “Even if new panels were needed, the rest of the equipment is worth it. Panels are a fraction of the cost.”
Other projects already done by OneEnergy in the area include one in Lanesboro and one in St. Charles. In a group of 10 completed projects, three were for Excel Energy in Wisconsin, two others in Fillmore County, and one in Winona County.
Another concern is the land rent amount. OneEnergy has previously offered either an amount escalating at 2% annually or a flat rate. Typically, most entities have taken the flat rate. “It’s not a source of revenue, but we should be providing services,” said Councilor Roger Knutson. “If rent, it needs to be at a reasonable rate and we need to protect ourselves from inflation, whether that’s a flat rate or a rate that increases with land values.”
Until a contract is in place, land rent is still negotiable. Currently, Fillmore County land rents are $175-250 an acre, according to Councilor Bob Hart. The current proposal to the city is $1,000 a year for the land.
The third concern is tying up Village land for 26 years that may see options for future development. Councilor Dennis Overland noted he’d had a few people question the location.
Planning and Zoning Commission split vote on the topic, 2:1 to approve moving forward. According to Zoning Administrator Jon Pettit, the opposed member of the commission was concerned about giving up agricultural land. “The rest of the discussion was about the appropriateness of having it here,” said Pettit. “We’re in agreement that it should happen, but the siting of it was the concern. The commission thinks we surely should have a solar facility.”
Community and Economic Development Associates (CEDA) has reviewed the project and is recommending it based off the city’s comprehensive plan.
“We’d be eating that land up for a long time, but I do think it’s the right thing to do. It does benefit everyone,” said Knutson. “I would like to see when we discuss this multiplier. We don’t need to get rich off of it, but protect ourselves so we don’t look back and say, ‘Man, we should have done something different.’”
Knutson motioned to approve moving the project on Village land forward. It was seconded by Overland. The vote was 2:1 with Hart opposed. Mayor Gordon Johnson and Councilor Mike Ebner abstained as MiEnergy employees. Due to their being five council members in attendance, the 2:1 vote did not meet quorum of three in favor. Johnson and Ebner were called to vote. Legal counsel Joe O’Koren noted specific points of criteria for conflict of interest voting. They include financial gain from the project and direction or oversight of the project directly, neither of which is the case in Johnson or Ebner’s case.
The council opted to table the decision in lieu of gathering more information regarding land rents and conflict of interest legalities. “The motion can stay on the table until consensus after 60 days,” added O’Koren. The city also wants to allow new councilor Hart to get caught up to speed on the project. Hart was appointed to the position last month after the resignation of Councilor Chad Rasmussen.
The second hearing, to allow a Conditional Use Permit (CUP) for MiEnergy for the purposes of a solar array, was also held. The current plan is to use 4.03 acres, contained in MiEnergy area, should the Village land lease project not be approved. The Planning and Zoning Commission reviewed and recommended the permit when it was considered previously. The council voted unanimously to approve the CUP.
In other news, Rebecca Charles, of CEDA, was present at the meeting to discuss an ongoing land inventory and property owner survey to be sent to potentially developable parcels. While 2,000 parcels were initially reviewed, 1,400 have been eliminated and another 400 are likely going to be eliminated due to terrain. Charles anticipates sending out less than 200 property surveys. The council approved the letter and survey.
CEDA is also looking into the possibility of utilizing Safe Routes to School (SRTS) Grants for trail systems within the Village. A survey regarding school safety needs and usage will also be mailed out.
The City of Rushford, in partnership with R-P Schools, attempted three times to secure a SRTS grant and was unsuccessful. “They’re extremely competitive, but worth looking into for opportunities. I think the Village has a better shot than Rushford,” noted Charles. A joint planning meeting with the Village and CEDA will happen next February/March.
The city also approved the final 2020 levy resolution in the amount of $450,000. This represents a 3.45% increase over 2019.
Lastly, Mayor Gordon Johnson has tendered his resignation from the council, effective December 17. “Unfortunately, it comes at a time when we have new people. Everyone will be on the ballot next year,” said Johnson. “I’ve had the pleasure of having the opportunity of working with you guys.”
Acting Mayor Dennis Overland will assume the helm for the city. A new councilor will need to be appointed to fill Overland’s former seat. The motion to accept the resignation and declaring a vacancy on the council was tabled until the next meeting and the best course of locating a new council member could be determined.
There will be no regularly scheduled council meeting January 7. The next meeting is Tuesday, January 21, at 7 p.m., at the Village Hall. The public is encouraged to attend.
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