The negotiations between local leaders and representatives of a company building a power plant in Colbert have been heavy on the memorandums — and short on the understanding. Attorneys for Madison County and Georgia Renewable Power (GRP) are on version 18 of a proposed “memorandum of understanding” (MOU) regarding the county’s plans to supply water to a planned 58-megawatt renewable energy power plant off Hwy. 72.
Madison County’s Industrial Development and Building Authority met Monday afternoon to discuss running a 12-inch water line from Elbert County to the power facility. The issue is multi-faceted and complicated at the IDA table. First, there’s the matter of securing funding for the water infrastructure project. Then, there’s engineering for the 12-mile water line — which includes consideration of water flow and pressure and how the line and planned tank will be used most efficiently with the rest of the county water system. There’s also ongoing back-and-forth contract (or MOU) negotiations between attorneys for the county and the company, which have been going on since March.
There’s also an intense timeline crunch.
Georgia Renewable Power intends to begin operations at the plant June 1, 2019. It is under contract with Georgia Power to tie onto the power grid and begin providing electricity by burning wood at the site by that date. If it fails to meet that deadline, it faces potential contractual problems with Georgia Power. So GRP is pressuring the county to move quickly to get construction under way. It can’t operate without water. But Madison County leaders didn’t anticipate MOU negotiations with the power company stretching for months. IDA officials have been reluctant to sign off on any agreement with the power company without assurances that county taxpayers won’t be left with a massive debt for infrastructure if the company fails to hold up its end of the deal. The debt payments on the water line will be made with monthly water use payments from GRP to the industrial authority.
The IDA also wants it in writing that the company won’t sue the county if the IDA isn’t able to meet its deadlines for providing water to the facility, since IDA leaders say that having the line from Elbert County to the plant by June 1 may not be realistic. GRP may use upwards of one million gallons of water per day. And the company wants at least 500,000 gallons of water per day by April 1 for testing purposes.
No actions were taken Monday, but there was plenty of discussion between IDA members, State Sen. Frank Ginn, IDA attorney Victor Johnson, BOC attorney Victor Johnson, BOC chairman John Scarborough and IDA engineer Chris Quigley.
On the funding front, Madison County has received approval of a $4.7 million loan from the Georgia Environmental Financing Authority (GEFA). The IDA has until the fall to formally accept the loan and doesn’t plan to do so until the MOU has been signed. GRP has promised Madison County $1 million in “seed money” to be held in an escro account. The company proposed that money to get the project going. The money would be returned to the company if the county gets grant funds totaling $1 million. GRP also plans to install a three-million gallon water tank at the site at a cost of around $1 million, then deed that to the county, which can use the tank to serve GRP and other customers.
The IDA has been given informal approval for a $1.5 million grant through the Appalachian Regional Commission (ARC) and a $500,000 grant from Georgia Economic Development Authority. But it doesn’t have those grants formalized in writing. And the IDA doesn’t want to sign off on the MOU until it gets official approval of the grants. Ginn put an official with the ARC on speakerphone at the IDA table Monday who said the grant approval should be finalized in Washington D.C. soon, but she was reluctant to give a date, adding “perhaps one or two weeks.” Azevedo said the IDA doesn’t have one or two weeks to spare.
Azevedo also asked the official if the GRP “seed money” or any other received grants would disqualify the county from getting the ARC funds and she said no.
The negotiations between the county and the IDA will continue in coming days. Johnson and Pruett said they received responses Monday on the latest proposed MOU. There are still points of concern. Primarily, the two local attorneys still want language protecting the county from any legal attack from the company if the IDA fails to meet the June 1 deadline for project completion or the April 1 deadline to provide enough water for testing purposes. Pruett noted language from GRP that the county could be “subject to unlimited damages” if it fails to meet the deadlines and forces the power company to lose money or breach its agreement with Georgia Power. Pruett said the MOU language needs to clearly establish that the county is not liable for company losses if the deadlines aren’t met. County officials note that the lengthy contract talks have been a two-sided endeavor, and delays in signing paperwork by county officials have been in effort to protect taxpayers. They don’t want to see the county punished for that due diligence, because the power company and county didn’t see eye to eye contractually and negotiations stretched for months.
Pruett said that if GRP can show in court the failure to meet the deadline is the county’s fault due to a bad faith effort, it could terminate the contract, but he said if the county has acted in good faith to meet the deadlines, the company shouldn’t be allowed to terminate the contract without paying a fee toward the county’s debt for the water line to the facility.
“Their response was you can supply 500,000 a day (April to June), then we won’t sue you for damages, otherwise all bets are off,” said Pruett.
IDA utility director Steve Shaw said he’s confident the county can provide 200,000 gallons of water per day, but 500,000 by April 1 might not be feasible. He said it’s possible, but he doesn’t want to promise that, noting that there are many variables that could interfere with such a promise.
Another sticking point in the MOU is GRP’s proposed elimination of the county water policy from the agreement. Pruett said he included the stipulation that GRP must abide by the county water policy and GRP struck that from the proposed memorandum. The county water policy spells out when service can be terminated due to lack of payment. Shaw noted that one north Georgia county is owed $1.5 million in delinquent water bills by a plant but is unable to shut off water to the company because its policy hadn’t been agreed upon. Johnson said the county will not approve any agreement with GRP without the company agreeing to adhere to the county water policies.
Azevedo said he wants to see the two parties work through the issue without any threats or fines. County leaders tout the project as good for the county, bringing jobs, a projected $1 million in annual sales tax revenue and several hundred thousand annually in property taxes. The 12-mile line and three-million-gallon water tank are also seen as big infrastructure upgrades along the county’s Hwy.72 industrial corridor, which could pave the way for more industry. The three-million gallon water tank will also allow the county to have all of its lines in the same pressure zone, meaning all lines can be tied together. The current water tanks at Madico Park (897 feet above sea level) and Hull (982 feet above sea level) are in different pressure zones. Those tanks are a fraction of the size of the planned GRP tank. Officials say the improved water flow should lead to greater fire safety, which could lower home insurance rates for residents on the system.
At the end of Madison County’s Monday meeting, the group held a closed session to discuss a “proposed land acquisition” and “personnel.” The group then opened the meeting. No action was taken on the personnel matter, but the group voted to authorize the IDA chairman or vice chairman to sign a land purchase.
“After the seller has signed the proposed contract, the IDA will vote in public and identify the property and terms of acquisition before signing any contract,” said Johnson.