In aiming to promote the continued economic development, power generation diversity, and energy security on the Kenai Peninsula, the Kenai Peninsula Borough Assembly amended borough code to broaden the economic development property tax exemption for Independent Power Producers. The ordinance which was enacted originally was postponed from a prior meeting to get feedback from Brad Janorschke, HEA’s General Manager.
The ordinance amends code in response to a proposed solar farm development on the Kenai Peninsula, who’ve previously provided public testimony, including a presentation made to the Assembly, that without a tax exemption, the project isn’t economically viable.
According to Assembly President Brent Johnson, the focus of the ordinance isn’t whether or not a future assembly decides to grant a tax exemption for the specific project, it’s that an exemption is available for economic development properties that satisfy the provided criteria. If enacted, an independent power producer (IPP) would be eligible for a tax exemption for up to 15 years. Richard Derkevorkian proposed an amendment, which sought to reduce the tax exemption from 15 years, down to 5 years, citing the gross revenue that’s projected to be made, however the vote failed.
Assembly Member Tyson Cox spoke in favor of the ordinance:
“Passing this does not give anyone access to any kind of exemption without coming to us again. What it does is just opens up a conversation and it allows us to have that conversation with IPP companies, whether it be folks that have already talked to us or even a new project, maybe there’s a project that comes along faster than that one. I mean, there’s things like that that can happen. This isn’t designed for one because we get to say yes or no to it. I also agree, Mr. Derkevorkian has some very good points and if some of those aren’t met, maybe we will just vote no, but tonight, if we vote yes, it gives us the opportunity to at least listen to those folks and see if it’s a good project.”
According to statute, the exemption would provide for a full exemption up to the amount required and shall not include taxes levied for special services in a service area.
The ordinance was enacted at the Assembly’s most recent meeting.
