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Deadline set on Cob tax offer  
January 27, 2005 by ANGELA TORRETTA

Peoples Energy is pressing for a decision from local leaders on its request for a property tax break for the power plant it wants to build near Bonanza.

The Chicago-based company recently sent a letter to the Klamath County Board of Commissioners and the Klamath Falls City Council, asking for a decision by next Tuesday. Peoples has asked the local governments to extend the Klamath Falls Enterprise Zone to the site where it wants to build the Cob Energy Facility, making it eligible for a tax break.

Copies of the letter were distributed Wednesday during a public meeting at the Lorella Community Hall, where local residents expressed their ongoing concerns about the impact the power plant will have in Langell Valley.

Cob Energy Facility spokesman Paul Turner said Wednesday that whether the plant gets built hinges on if it receives a break on its property tax liability, estimated at $71.3 million over the first 15 years.

"My margins are that thin," he said.

The company has offered to make an annual payment in lieu of taxes amounting to half the property tax bill. The proposal would bring in about $3.2 million the first year and decrease as the property devalues to about $2.4 million after 15 years.

Both the commissioners and the city council would have to approve changes to the enterprise zone boundary. The Board of Commissioners will hold a public hearing on the matter at 10 a.m. Tuesday.

Turner fielded questions from about 50 farmers and ranchers who attended the meeting Wednesday in Lorella. The deal, which would allow county commissioners to distribute the money as they see fit, drew the ire of at least one man in attendance.

He left the meeting after Commissioner Bill Brown said he didn't have a plan for how money would be disbursed, and was followed by three other men.

Fellow Commissioner Al Switzer said Bonanza schools would be a top priority.

All three commissioners attended, but the meeting was led by Brown, Turner and Langell Valley resident Walt Smith.

Those who stayed for the two-and-a-half hour meeting had questions ranging from possible property devaluation to concerns that other land zoned for farm use could be industrialized.

Turner told audience members that the company considered making a payment directly to Bonanza Schools, but said he was concerned that choosing one place to give money to would cause a rift in the community.

"I'm going to give the money to the elected officials," he said.

Karen Palmquist, who owns a small ranch in the Langell Valley and was attending the meeting with friends, said she thought the county was reaping the benefits of the valley's resources.

"Langell Valley is paying the price," she said. "Langell Valley won't see any of it."

Even if officials agree to the enterprise zone, it's not guaranteed the plant will be built.

Irrigation-rights group Save Our Rural Oregon said it will appeal the plant's siting permit to the Oregon Supreme Court.

The proposed 1,150- to 1,160-megawatt natural gas-fired plant has been especially controversial among Langell Valley residents, who say plant developers are getting unfair access to water.

Cob developers Peoples Energy responded to criticism by changing the plant's design from water cooled to air cooled, significantly reducing the amount of water used.

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