April 13, 2024
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Background: Somervell County has already passed an agreement to give Yellow Viking, who is going to put a solar panel farm in eastern Somervell County, a tax abatement. Yellow Viking had requested an additional 2 years of tax abatement and the hearing was yesterday. (Updated this a bit to correct names and spellings, with thanks to Michelle Reynolds, County Clerk.)

Rough Transcript: Watch for all exact wording

Danny Chambers discusses, first, how the hearing was publicly advertised.

For Yellow Viking, Scott Deatheridge lawyer from Dallas

Not here today to ask for approval of the tax abatement. Originally set that the construction completed by Dec 31, 2024. ….

Chambers- new completion date on Dec 31 2026

Tom, Tomohiko Ono. Came from Osaka Gas, senior director of renewables group. (Made an editing change here: The info on the contract is

YELLOW VIKING DEVELOPMENT ONE, LLC.
NAME/TITLE: TOMOHIKO ONO/VICE PRESIDENT
1 NORTH LEXINGTON AVENUE, SUITE 1400
WHITE PLAINS, NY 10601
TELL: (914) 253-5515
EMAIL: RENEWABLES-GRID-SOLUTIONS@OSAKAUSA.COM)

European Energy and Osaka Gas USA decided to partner (PR piece from May 2023 showing the sale of EE Solar project to Osaka Gas USA. ) We provide the capital and ownership of this project. In Japan, also in the US in Houston, New York and west coast, about 200 employees and have invested about 4.5 million dollars in the United States.. natural gas.. generation project.. For myself, I grew up in the state of Georgia, been back and forth between Japan and the states. Yellow Viking importance, we have taken responsibility on, invested a lot of money in Texas, bring products like this to the market. As Scott was saying, industry has some challenges. One is supply chain challenges, led us to need more time to bring the project to completion.. Also a lot of companies want to do energy projects and bring them quickly to market in the US. .. We’ll have more substantive construction plans starting next year… Hope to complete the project in 2026. .. We want to welcome the people in this county to see the project.

Chambers: It’s not changing the abatement, it’s not lengthening the abatement, it’s changing the completion date from 2024 to 2026. .. Abatement does not start until the completion of the project, the following January the abatement kicks in, 6 year agreement, discussions started in 2019. Substation is not part of the abatement, stays on tax roll 100 percent for life or project

Deatherage. Whatever part is owned by Oncor is not under our tax abatement.

Audience: What percentage is owned by Oncor. Oncor not involved in the solar farm itself

Deatharage. In order to get on to a transmission line, right voltage, etc we may provide financial backing for that substation, most of that supplied by Oncor. (Asks Mike the engineer) 18-20 million dollars, additional property being installed that is not part of the abatement, should be a taxable asset for the county

Audience: Not the 30 million that has been touted, now you’re saying it’s just part of it.

Chambers: Always been. When we did the rough estimates early on 22-25-30 because we didn’t know when the tax abatement was going to kick in, low end, 22-30 hard to get that will we get that

Mike (engineer). Michael Kline. Oncor Switchyard and high voltage substation, brings voltage up to the transmission voltage, how the abatement works is that the substation area owned by Oncor put on tax rolls at full value. The area of delineation which is owned by the LLC, that is part of the abatement, where that line is a final estimate, to be determined (Oncor) dictated by Oncor, not the LLC.

Audience: Economic development opportunity for Somervell County. … I don’t see how this is a huge economic gain for Somervell County

Todd Tolkinen, Project Director of McCarthy Building: At peak in 2025, will have 250 craft employees on site. This year in 2024 will start with staff, probably 50 people through 2026.

Chambers: impact for hotel, gas, beer food.

Tolkinen: We went to pull from this labor market, if this market cannot supply those numbers, will pull in travelers. Would love to do 100 percent from the county, that’s the goal, but in reality doesn’t work that way, job fairs, postings, but we don’t get that response like we want to get. That’s why we have to use travelers, 30 percent outside the country.

audience: just as close to Cleburne as you are here, bulk could come from outside the county.

Tolkinen: In reality have to staff the project to meet the deadline.

audience: What is long term benefit to Somervell County in way of jobs

Mike: For long term for jobs, right now tax rolls has one or two large taxable assets, depreciated could roll off the tax roll, gives county another taxable asset long term not to increase tax rates for the community. 345 line through Somervell, overall, hopefully the county will benefit from lower prices for coop. For jobs, we believe 10 permanent jobs plus an additional 25 indirect jobs. Most of those jobs will be technicians, fix equipment, operate facility, very high paying technical jobs for electricians (construction jobs). Bringing in all those additional trade jobs.

Vote: All vote to close public hearing. Then open the regular meeting. First up, vote to amend the abatement contract

Audience: Please recap the benefits to citizens of Somervell County.

Chambers: That has been discussed with them. Abatement is $931,830 outside of the substation is going to be 75-150,000 a year added to tax rolls once in production. Do not have an agreement. Donation, not ironclad, emergency management and working with the schools. Not even handshake agreements yet, that’s when those agreements will be brought to the court, once there is income.

Audience; I’m tired of handshake agreements.

Chambers: Not a handshake agreement. until we see that this goes into production, whatever year, that’s when those agreements will be brought to the court. (once there is income) . Until they get into production, they have no income to bring to the court. New court can say “Now you’re making money here, playing taxes, we need to discuss” from 71-89 power plant was under constructions, but agreements for school buses, etc didn’t go into effect, we review those every year.

Ray: Educational opportunites. Company did verify they would be open to this.

Tom: What way works best for community here.

Audience: This isn’t their first rodeo, know what they are going to get so to hope they come through… We will give you X percentage of profits.

Audience: Our constituents don’t really want you to have these abatements.

Chambers: Not going to hurt because it was money we weren’t going to have. Argued this out in previous years. Abatement previously didn’t look it was going to work out, why the substation is outside the abatement agreement, went from 10 years to 6, bring about 2 million dollars in, who knows that will happen to values and taxes, but we need.. for independent, no disrespect to the power plant, don[t have a lot of property in Somervell County that this can be done on. After 2030, need to see where taxes, services, how they wil be provided. Legislators cut into our tax rate about what we can provide. Anything we have on the tax rolls is going to help out.

Voted in. Judge Chambers indicated, with Michelle, that the contract signed by the commissioners will be put up with the minutes on the SomCo website without waiting for the other side to sign, and I believe he has it in his office. Here are the 2 amendments

P.S. SIDE NOTE: Interesting that when Lone Star was putting in the transmission lines that would go through Somervell County, Somervell County Commissioners Court in August 2010 didn’t want it to come here

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