County goes with Cob's offer

http://www.heraldandnews.com/articles/2005/04/20/news/top_stories/top1.txt

 Wednesday April 20, 2005 by DYLAN DARLING

The Klamath County Board of Commissioners laid the financial foundation for the Cob Energy Facility Tuesday by agreeing to the developer's offer to pay $2.5 million per year for 15 years instead of property taxes.

Commissioners Al Switzer and John Elliott voted for the agreement. Commissioner Bill Brown voted against it, continuing his argument that Chicago-based Peoples Energy should pay full taxes on the plant planned for the Langell Valley, about three miles from Bonanza on Langell Valley Road.

"I think we were in the position where we had to try to get the best we could," Elliott said.

The 15 years of payment would start once the plant is up and running.

In addition, the agreement calls for Peoples Energy, or anyone who buys the plant, to pay $500,000 for road repairs, plus property taxes, during the plant's construction. The construction should take about two years, and property taxes during that time would be about $4 million, said Paul Turner, Cob spokesman.

Turner put out the $2.5 million offer at a meeting with commissioners Feb. 1 as part of a deal for the enterprise zone, which would give the company a break on property taxes. If the city of Klamath Falls agrees, an already-existing enterprise zone would be extended from Klamath Falls to the plant site, allowing the agreement.

At that meeting, Elliott proposed a deal that would have the company pay $3 million per year, and Switzer introduced a plan that would have it pay $2.8 million per year.

Both at the February meeting and again Tuesday, Turner said $2.5 million was as high as he would go.

Switzer said Tuesday that when the tax payments during construction and the road payment are added to the yearly fee, the deal is worth $42 million.

"When you look at that, it doesn't look that bad," Switzer said.

The Cob plant would burn natural gas to create either 580 or 1,160 megawatts of power - Peoples Energy officials haven't determined which of the two sizes of plant to build yet - and be 21 miles east of downtown Klamath Falls.

According to the agreement made Tuesday, the company would pay $1.5 million per year if it built the 580-megawatt plant.

Peoples Energy's lawyers will now look over the agreement. Commissioners will sign on May 10, barring no major changes, but the enterprise process is far from over.

After county commissioner approval, the agreement needs to be okayed by the Klamath Falls City Council and then come back to the county for further review.

Brown, a Langell Valley native, wasn't the only one who still opposes the deal for the power company.

"Let's negotiate a higher amount," said Lyn Brock, a Langell Valley resident and president of Save Our Rural Oregon, a group in opposition to the Cob plant. "Let's get as much as we can get."

She said the company had said it had a final offer before - $1.5 million - and then went up.

Others welcomed the deal, saying it will help get the plant built which would bring new jobs.

"People do need jobs in this county," said Trey Senn, executive director of the Klamath County Economic Development Association. He said the county has 10 percent unemployment.

Peoples Energy hasn't set a date when construction would start, Turner said.

"We are still along ways from constructing this facility," he said.

The $2.5 million would be a substantial contribution to the county's general fund, Switzer said. In comparison, the county collects $2,490,612 in taxes from farm and ranch land owners.

"That's a staggering figure," he said.