Renewable IPP CEO Jenn Miller presents information about solar power during a meeting of the Kenai Peninsula Borough Assembly on Tuesday, Oct. 12, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Renewable IPP CEO Jenn Miller presents information about solar power during a meeting of the Kenai Peninsula Borough Assembly on Tuesday, Oct. 12, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Assembly OKs new tax exemptions for independent power producers

The ordinance was brought forth in response to a proposed solar farm on the Kenai Peninsula

The Kenai Peninsula Borough will offer a new kind of tax exemption for independent power producers following approval from the borough assembly during their regular meeting Tuesday.

The ordinance passed Tuesday came after months of deliberation and designates independent power producers as eligible to be partially exempt from borough property taxes. Those who supported the code changes say it will help diversify the borough’s energy sources and spur economic development in the borough, while those opposed said the proposed agreement lengths were too long.

Per existing borough code, the exemption amount is determined by the assembly and can be for up to 50% of the property’s assessed value. In the case of IPPs, an exemption can be given for up to 15 years. The ordinance defines independent power producers as companies that own and operate a power generation facility larger than two megawatts and that sell electricity to a public utility regulated by the Regulatory Commission of Alaska.

The process of writing IPPs into that section of borough code kicked off after Renewable IPP, a company that develops, constructs and operates utility-scale solar farms, last year approached the assembly about putting a solar farm on the peninsula. The project, if it goes through, would be the biggest solar farm in Alaska at 60,000 solar panels and would cover about 160 acres in Sterling.

Assembly members killed an effort by Richard Derkevorkian, who represents Kenai, to reduce the maximum length of an exemption from 15 years to five years, which is consistent with the length of other exemptions in borough code. In proposing the reduction, Derkevorkian said any companies receiving borough subsidies should be able to stand on their own after five years.

“I’m not opposed to incentivizing new business, but I’m opposed to subsidizing a business for 15 years,” Derkevorkian said. “If it can’t stand on its own after five years, it shouldn’t be a business.”

Assembly member Lane Chesley, who represents Homer, pushed back on the idea that independent power producers can be compared to other businesses because of how heavily the industry is regulated. He added that the borough’s precedent of maximum exemption lengths of five years may not be long enough because it hasn’t brought new development to the borough.

“I don’t think five years is long enough,” Chesley said. “I don’t know what the magic number of years is, but we’ve had five years on the books for a long, long time and it’s not attracted economic development to the borough.”

Kenai Peninsula Borough Mayor Charlie Pierce has long pushed for Renewable IPP to come back with clearer numbers showing how the project would benefit borough residents if the company receives a borough tax exemption. Pierce said Tuesday he’d like to see a review process put in place for exemptions, especially if the agreement is for 15 years.

Assembly member Tyson Cox said in response that a new section of borough code will require any exemption recipients to certify annually that the factors that made them eligible for the exemption “remain in existence.”

When Renewable IPP CEO Jenn Miller first presented the project to assembly members last October, she said the company was looking for a property tax exemption of around 80%. The Kenai Peninsula Borough mill rate in Sterling is about nine, about 2.35 mills of which could be eligible for exemption under the ordinance.

Mill rates are used to figure out how much someone will pay in property taxes during a certain fiscal year. To calculate how much property tax they expect to pay, an individual must divide the mill rate by 1,000 and then multiply that by their property’s taxable value.

If fully exempted from the eligible two mills, Renewable IPP’s property tax exemption would be around 25%. Though the exemption is not what Renewable IPP originally asked for, Miller said during an April 5 assembly meeting, the ordinance language that would make the exemptions last for up to 15 years “certainly helps.”

Miller said Wednesday that Renewable IPP is continuing to progress the Kenai Peninsula solar farm project and “look(s) forward” to applying for the exemption “once studies are complete and we can clearly demonstrate the economic development benefit and need for exemption to the borough.”

“We are thrilled that KPB is incentivizing IPPs to help make our electricity supply more resilient and cost competitive,” Miller said via text message. “The Assembly’s ordinance approval sets the stage to inform our analysis and decision making, making it much easier to develop IPP projects in the Kenai Peninsula.”

The assembly voted 7-1 in favor of the new exemption opportunity, with Derkevorkian casting the vote in opposition.

The Kenai Peninsula Borough Assembly’s Tuesday meeting can be streamed on the borough’s website at kpb.us.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

More in News

Girl Scout Troop 210, which includes Caitlyn Eskelin, Emma Hindman, Kadie Newkirk and Lyberty Stockman, present their “Bucket Trees” to a panel of judges in the 34th Annual Caring for the Kenai Competition at Kenai Central High School in Kenai, Alaska, on Thursday, April 18, 2024. (Jake Dye/Peninsula Clarion)
Bucket trees take top award at 34th Caring for the Kenai

A solution to help campers safely and successfully extinguish their fires won… Continue reading

Children work together to land a rainbow trout at the Kenai Peninsula Sport, Rec & Trade Show on Saturday, May 6, 2023, at the Soldotna Regional Sports Complex in Soldotna, Alaska. (Jake Dye/Peninsula Clarion)
Sport show returns next weekend

The 37th Annual Kenai Peninsula Sport, Rec & Trade Show will be… Continue reading

Alaska Press Club awards won by Ashlyn O’Hara, Jeff Helminiak and Jake Dye are splayed on a desk in the Peninsula Clarion’s newsroom in Kenai, Alaska, on Monday, April 22, 2024. (Jake Dye/Peninsula Clarion)
Clarion writers win 9 awards at Alaska Press Club conference

The Clarion swept the club’s best arts and culture criticism category for the 2nd year in a row

Exit Glacier, as seen in August 2015 from the Harding Icefield Trail in Kenai Fjords National Park just outside of Seward, Alaska. (Photo by Jeff Helminiak/Peninsula Clarion)
6 rescued after being stranded in Harding Ice Field

A group of six adult skiers were rescued after spending a full… Continue reading

City of Kenai Mayor Brian Gabriel and City Manager Terry Eubank present “State of the City” at the Kenai Chamber of Commerce and Visitor’s Center in Kenai, Alaska, on Wednesday, April 17, 2024. (Jake Dye/Peninsula Clarion)
Mayor, city manager share vision at Kenai’s ‘State of the City’

At the Sixth Annual State of the City, delivered by City of… Continue reading

LaDawn Druce asks Sen. Jesse Bjorkman a question during a town hall event on Saturday, Feb. 25, 2023, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
District unions call for ‘walk-in’ school funding protest

The unions have issued invitations to city councils, the borough assembly, the Board of Education and others

tease
House District 6 race gets 3rd candidate

Alana Greear filed a letter of intent to run on April 5

Kenai City Hall is seen on Feb. 20, 2020, in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)
Kenai water treatment plant project moves forward

The city will contract with Anchorage-based HDL Engineering Consultants for design and engineering of a new water treatment plant pumphouse

Students of Soldotna High School stage a walkout in protest of the veto of Senate Bill 140 in front of their school in Soldotna, Alaska, on Wednesday, April 17, 2024. (Jake Dye/Peninsula Clarion)
SoHi students walk out for school funding

The protest was in response to the veto of an education bill that would have increased school funding

Most Read