VIROQUA, Wis. – The Vernon County General Government Committee heard a preliminary presentation from Nakomis Energy of Minneapolis Minn, last week to lease 85 acres of what is known as the county farm for a 15-megawatt solar project that could net the county about $4.2 million over the next 35 years.
Business Development Director for Nakomis Energy, Mark Feitz presented the committee with an overview of what the project would like and how a lease with the county would work. Feitz said Nakomis Energy has done over solar 40 projects, mostly in Minnesota, that include community solar projects as well as direct to utility projects. Feitz said this project would be a direct to utility project that would sell energy directly to Xcel Energy. Feitz said part of what made this site attractive is its proximity to Xcel infrastructure allowing them to tie into their system with relative ease.
The site Nakomis has identified for the project would be located along Railroad Avenue just north of, and around, the new county highway shop.
“Effectively what we are looking to do is lease a section of land for a 25-year period to effectively build a mini power plant on site,” said Feitz.
Feitz said the process to get a site designed and approved is slow and would likely take at least three years before construction could even begin in a best-case scenario.
The preliminary proposal states that Nakomis would pay Vernon County $2,500 initially to explore the feasibility of project including regulatory requirements with Xcel Energy and other governing bodies. Feitz said if that process shows the system can be built and that financially it makes sense, then Nakomis and the county would enter into an operating lease. That second phase, the operating lease, as proposed now would pay the county $1,000 per acre that would increase two percent annually for 25 years. The proposal also has two five-year options built in at the end allowing for up to a 35-year lease.
The net income from such a lease if the county could reach an agreement would be around $2.7 million for the initial 25-year lease and about $4.2 million if the two five-year extensions are exercised. Feitz said the company would be required to have a performance bond if the project is approved so they would be required to set money aside that would be available at the end of the lease to decommission the structures and return to farmland if that is what the county would want to do at that point.
Vernon County Buildings and Facilities Manager and County Highway Commissioner Phil Hewitt said the area that the project is proposed for is one of the more highly erodible areas of the property and establishing it with grasses and pollinators combined with a solar project would help protect it. Hewitt also said, the project as proposed, would still allow the county highway shop room for expansion if it would be needed in the next 25 years.
“We still have room to grow to the south and the east if we need it,” said Hewitt.
Some committee members expressed concern about removing farmland from production. Feitz said they typically use the area to establish prairie plantings using pollinator friendly habitat. When asked about maintenance and weeds Feitz said they have contracted with various companies to graze goats.
Committee member Dave Eggen suggested a possible arrangement similar to what other utilities use in the area that utilizes Amish sheep farmers to graze under the panels.
“I feel like we talk all the time about creative ways to increase revenue at the county,” said Taylor. “This seems innovative. And we haven’t completely taken ag (agricultural uses) off the table. I don’t think it would be responsible to not explore this.”
County Administrative Coordinator Cassandra Hanan asked if the county would be required to put the project out for formal “requests for proposals” (RFP) to see if there are any other companies that might want to propose similar projects. The committee decided to refer the matter to the county corporation counsel to get an opinion on whether a formal RFP process was necessary.
Hanan said that process may be necessary to be compliant with county policy to “provide equal opportunity for use of the land.”
The committee agreed the project has enough promise to forward the idea to the full county board to see if they want to negotiate a detailed lease. The issue will be presented to the county board of Supervisors at their July meeting.
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