07-031 RES
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RESOLUTION 07-21-
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION APPROVING THE CONSTRUCTION
OF A 150-200 MW SIMPLE-CYCLE PEAKING PLANT FUELED PRIMARILY
BY NATURAL GAS WITH FUEL-OIL BACK-UP
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
Great River Energy (GRE) plans to construct a 150-200 MW sirnple-
cycle peaking plant fueled primarily by natural gas with fuel-oil back-up
(the "Project"); and
GRE has identil1ed a site in the City of Elk River (the "City") where
GRE has an existing 230 kV substation and a RDF-fIred generating plant
as a leading site for the proposed Project due to the proximity of high
voltage transmission lines, natural gas pipelines, and compatible land
uses; and
prior to construction, the Project will need to be issued a Certificate of
Need and Site Permit from the Minnesota Public Utilities Commission,
and an Air Permit from the Minnesota Pollution Control Agency; and
the Project will provide wholesale electricity to benefit primarily GRE's
28 member electric cooperatives, including Connexus Energy, which
provides electricity to Elk River Municipal Utilities; and
the Project will provide significant jobs during construction; and
the Project is expected to pay real estate taxes; and
in order for GRE to proceed with the development of the Project in Elk
River, the annual taxation of the Project will need to be comparable with
other existing or proposed peak electric generation facilities within the
state; and .
under current law, the Project would have to pay approximately $1.06
million in its first year due to property taxes on electrical generation
equipment, in addition to approximately $310,000 in real estate taxes and
personal property taxes on natural gas and transmission line upgrades;
and
the Legislature has granted personal property tax exemptions to more
than two dozen proposed power plants in Minnesota since 1994 and, as a
result, personal property exemptions are critical to be competitive with
other existing and proposed plants that have received an exemption in
Minnesota; and
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WHEREAS,
GRE is willing to enter into a host agreement with the City that will
provide an in-lieu payment to the City for a period of time in return for
the City's support for a personal property tax exemption on the electrical
generation equipment.
NOW THEREFORE BE IT RESOLVED, the City of Elk River, acting by and through
its City Council, RESOLVES:
1. That if an appropriate host agreement is entered into between GRE
and the City, then the economic benefits to the City from the
construction of a 150-200 MW electric generation facility using
primarily natural gas operating in a simple-cycle mode operated in
Elk River at the site of GRE's existing RDF-fired generating plant
and 230 k V substation will outweigh any potential impacts on the
City; and
2. That the City supports an amendment to the 11innesota property tax
statutes exempting the Project's electric generation equipment from
personal property taxes, taxing only its real property and the personal
property of the transmission and natural gas interconnections,
provided that an appropriate host agreement is agreed on and entered
into. Such an amendment would result in taxation similar to other
previously exempted electric generation projects in 11innesota.
Passed and adopted by the Elk River City Council this 20th day of February, 2007.
,:1T tft
Tina Allard, City Clerk