Commissioners give tax abatement to Summit coal gasification plant
Ector County commissioners approved the Summit Texas Clean Energy project’s 10-year tax abatement at its Monday meeting.
“We’re getting ready to make this project happen,” Summit Director of Projects Laura Miller said as she addressed the court.
The 400-megawatt plant is designed to capture 90 percent of the carbon dioxide it produces. Summit plans to sell the CO2 for enhanced oil-recovery, which will help companies bring more oil out of the ground. The plant will also produce and sell electricity and fertilizer.
The court approved the tax abatement to cover 100 percent of the estimated $2.2 billion project, but the agreement still needs to be finalized and then brought before the commissioners’ court again for approval. The tax abatement is contingent upon the creation of 1,500 to 2,000 construction jobs and the creation of 150 full-time jobs after construction. The project expects to break ground by the end of this year and be operational by the end of 2014 or early 2015.
Language expected to be included in the final agreement includes making the tax abatement non-transferable in case Summit sells the plant before the 10 years are up. It will include a clause that would guarantee payment of property taxes to Ector County in the event of a transfer of ownership to a tax-exempt entity after the abatement expires. This language is to protect the county as a taxing entity after two power plant companies agreed to sell their Odessa plants to High Plains Development Corporation, a nonprofit corporation based in Lubbock that under current law is property tax exempt. Legislation to change this law was authored by Tryon Lewis, R-Odessa, and Kel Seliger, R-Amarillo, and is moving through the Texas Legislature.
The financing for the plant is expected to close in September, following the U.S. Department of Energy’s decision on whether to fund more than a quarter of the cost based on an environmental impact study.
Commissioners approved a 10-year tax abatement in May 2007 for the FutureGen project, which was planned for the same 600-acre site in Penwell. Summit became interested in the site after DOE chose another location in Illinois for FutureGen in December 2007.
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