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http://www.heraldandnews.com/articles/2004/08/23/viewpoints/op_ed/9900.txt

Full-page ad on Cob power plant a fabrication

Published August 23, 2004

By BILL BROCK

Bill Brock is a resident of Bonanza.

I feel I need to comment on the full-page fabrication presented by the proponents of Cob power plant. I will address each point as it was presented on page F6 in the Aug. 15 Herald and News.

Property tax abatement: The power plant's developers would like us to believe that a $600-million facility that generates $71.3 million in property tax revenue for the state, should pay only $15 million in lieu of property tax. We are supposed to believe that we should give up $3.75 million dollars a year because the Cob power plant will be "a good corporate neighbor."

Enterprise zone: Yes, the creation of an enterprise zone is an economic tool, but it had real worth before our local state legislators cut the heart out of the law.

Before behind-the-curtain conferences and secretive changes to the law, the creation of an enterprise zone did actually provide some economic growth. Prior to those changes, to qualify for the enterprise zone Cob developers want, the company would have to employ 100 or more people. But since the plant could not come close with its planned 25 employees, a behind-the-curtain deal was struck. Now all that is required is 10 employees.

Granting an extension of this enterprise zone allows the power plant to receive a huge tax break so it can profit in a questionable business miles from any potential user.

Granting an enterprise zone for the plant will bring no tangible benefit to Klamath County or the state, only a gaping hole in the support infrastructure that property taxes are supposed to fill.

Economic impact: "Cob will provide $4 million in local spending ..."

The majority of that $4 million will benefit a few businesses supplying construction material. Most construction workers will be transient, just like those here for the construction of the cogeneration plant. Sure, these workers will spend some dollars while they are here, but I don't remember a huge swell of dollars flowing into the local economy. As for the $3 million annually for personal income, that includes the employment cost to Peoples Energy, and the money paid to the employees. Take out the company-incurred costs and state and federal taxes, and you see a much smaller figure.

Education: Cob's annual fiscal contribution, on the order of $1 million in lieu of taxes, could be used for any purpose and does not have to provide a single dollar for schools.

Because this money appears as a bribe, the county can use it any way it sees fit. I am not sure I like that. Just think how well that long overdue school maintenance program will fare with a true and honest portion of the Cob property tax assessment.

Site retirement: It is true that Cob developers will post a nonrefundable bond to cover the retirement costs. What is not said is that the developers and the Oregon Energy Department have yet to determine the proper size of that bond. We all know that determining the cost of something 30 years down the road is next to impossible. So what if the bond in not even half enough? Guess who pays the rest.

Capital improvements: It is true that Cob's property tax assessment will decrease at the end of the enterprise zone term. It is called depreciation, and we all use it. Cob will be no different. The gas-fired turbines and steam generators that will be used in this facility are very high-maintenance units, (as can be seen from the $45 million that the city of Klamath Falls has had to put in maintenance funds for its cogeneration plant in the last couple years) and their value decreases with each minute of run time. Fifteen years from now, are we still going to be burning natural gas to make power? I sure hope not. The plant will be worth nothing and will be assessed accordingly.

Employment: Construction workers will come from all over the nation for their special part in the project. They will spend some of their money here, but most will spend the majority of it at home.

Somehow Cob developers have confused personal earnings with a benefit to Klamath County. Money made in this county does not always benefit this county. The estimated 30 permanent positions will be filled by people from some other place. How many out-of-work power plant operators in Klamath County are looking for work? How many high-who rely on staff recommendations.

Oregon's power needs: Today, if the plant was finished, it could not serve anyone.

There is not sufficient capacity on the California Oregon Intertie (COI). Oregon and Washington have sufficient power for the next 10 to 15 years and California for the next five or six, or so says the Northwest Power and Conservation Council, the Western Electricity Coordinating Council, and the California Independent System Operator. California does import a significant portion of its power, and some of that flows south from Oregon.

In order for Cob to sell power south, it must displace an existing generator on the system. Cob admits this in a commissioned study by Navigant Consulting, "The Cob Energy Facility can be integrated into the COI operations without significant impact to system reliability if COI south-to-north transfers are reduced megawatt for megawatt to accommodate Cob Energy Facility generation." And further "The Cob Energy Facility can be accommodated without adversely impacting the transmission system if certain resources north of the project are displaced to maintain COI at current operating limits." This refers to north-to-south power flow. The key thoughts here are "transfers... reduced" and "resources ... displaced," meaning an existing supplier must be removed from the system.

Water: Proponents say Cob's water rights will be restricted to 210 gallons per minute. First, Cob only has a proposed order for a water-use permit - not a water right.

More than 30 Langell Valley farmers have drought permits for wells drilled years before Cob applied for a water right. Most of those 30-plus permits have been awaiting resolution by the Oregon Water Resources Department for more than 12 years. Now we hear that the department is considering placing Langell Valley under a "critical water area" designation. Any amount of water for heavy industrial use on exclusive farm use land is too much.

Land designated as farm-use only: Power plants are a conditional use on exclusive farm use land and if they remove less than 12 acres of farmland designated as high-value, or up to 20 acres of farmland designated as low-value. To take more than 20 acres requires an exception to state law.

The plant will occupy anywhere from 50.6 acres to 236 acres, depending on which page of the application you read. Anywhere from 15 to 131 acres would be irrigated pasture - irrigated pasture fenced to restrict livestock grazing. I think that takes it out of farm use. Cob developers have asked for an exception to state law, but has not provided sufficient evidence to prove that it should be granted.

Agricultural lands: "COB is sited on arid, non-irrigated, low production land." Not much of a response. The land in question is being farmed for dry-land forage, but has been irrigated to produce quality seed potatoes in the past. The full-page fabrication notes that the response comes from the Oregon Office of Energy and, when referenced, turns out to be from a public comment taken at one of the public meetings, and not fact.

Emissions: The fact that the power plant will pollute the air is contained in the air contaminant discharge permit issued by the state Department of Environmental Quality. The power plant will pay $13 million per year to the Climate Trust for exceeding pollution limits. Oth-er "mitigation" is required in the permit, none of which would be required if the plant met "all strict federal and state air emission standards," as the full-page fabrication tries to convince the reader. When asked why Cob needed to purchase 2,700 acres around the facility site, the answer was "so that we could get the sound levels low enough to meet state standards." I guess it's OK if you pollute your own land with light, sound, and chunks of really nasty stuff.

Development process: Cob developers try to convince us that the process of siting one of these behemoths is well regulated, but, in fact, the Oregon Energy Facility Siting Council is a group of lay members who rely on staff recommendations. I have been told by this same staff that its function is to make sure that all the "i's" are dotted, and all the "t's" are crossed - in essence a rubber stamp. All relevant change to the application has come as a result of public comment. It is too bad that they won't listen when we tell them where to to put it.

 


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