photo by: Shutterstock

Solar panels are shown in this photo from Shutterstock.

It has long been known the proposed 600-acre, $234 million Kansas Sky Energy Center solar farm won’t pay much in property taxes, thanks to a state law meant to incentivize renewable energy projects.

But what hasn’t been known is how much — if any — the developers of the massive utility project slated for rural northern Douglas County would pay local governments for the services they’ll have to provide the project — everything from fire protection to road maintenance.

Douglas County commissioners on Wednesday may answer the question: A little more than $200,000 per year for the next 10 years.

Developers of the Kansas Sky Energy Center and County Administrator Sarah Plinsky are presenting the approximately $200,000-per-year plan to county commissioners for approval at the commission’s weekly meeting.

The solar project — which would be the largest commercial development in Douglas County’s history — has sparked both an outpouring of support and opposition from community members. The project would largely be located on farmland surrounding the Midland Junction grain elevators north of North Lawrence.

The agreement county commissioners will consider is called a Payment in Lieu of Taxes, or PILOT, agreement. Such agreements are happening between counties and utility companies across the state since the Kansas Legislature has approved laws that largely exempt solar and wind projects from paying traditional property taxes.

Members of the renewable energy industry have argued that such tax breaks are needed to make large solar and wind projects financially feasible to build. Local governments, though, have argued they need to receive some money from the large projects to cover the costs that local governments have in providing services to the projects.

The deals that other county governments have struck with solar and wind projects across Kansas have varied greatly. The proposed $200,000-per-year agreement in Douglas County is more than some but significantly less than several other projects, according to data provided by the county.

The county provided information about 12 solar and wind projects that have negotiated PILOT agreements with Kansas counties. One key metric used by the county is the amount of the PILOT payment compared to the amount of electricity the solar or wind project produces. In Douglas County’s case, that figure is $1,358 per megawatt of electricity proposed to be produced by the Kansas Sky Energy Center.

The average amount for the other 12 PILOT deals in Kansas is $1,849 per megawatt of electricity.

Some counties, though, have negotiated deals that pay them more than $3,000 per megawatt of electricity. A 100-megawatt western Kansas wind farm in Spearville pays Ford County $3,062 per megawatt produced. Another such farm in Ellis County pays $3,952 per megawatt.

If Douglas County were to insist on the same rate Ellis County — home to Hays — is receiving, the county would get annual PILOT payments of just less than $630,000 per year from the Kansas Sky Energy Center. The project proposes to produce 159 megawatts of electricity, which is enough to power about 30,000 homes.

However, the solar farm developers — the project will provide electricity to Evergy customers but is being developed by third parties — might not agree to pay those amounts. The deals in Ford and Ellis counties were negotiated long ago — 2011 and 2015, respectively — and several recent deals have been closer to the amount proposed by Douglas County.

A huge 400 megawatt solar project proposed for Bourbon County — home to Fort Scott in southeast Kansas — has a $1,500-per-megawatt deal, according to the data provided by Douglas County. It is one of the few solar projects on the list of 12 provided by the county. Far more wind farms have been developed in the state than solar projects. Only one other solar deal was listed — a small 53-megawatt solar farm in Russell County that pays just $664 per megawatt of electricity.

Douglas County’s deal has a potential twist, as well. The county and the project’s developers may negotiate a separate agreement that pays specifically for costs related to stormwater and agrivoltaics, a type of agriculture system that would co-exist with the project’s approximately 8 million square feet of solar panels.

However, neither the stormwater management plan nor the agrivoltaics plan has been presented to county commissioners for approval. County staff, in its memo to commissioners, acknowledged those two plans could produce new costs for the county, which the project should pay for. When asked why the county was comfortable moving ahead with a PILOT deal before those costs are known, county spokeswoman Karrey Britt clarified that there will be future negotiations and a separate agreement for these expenses at a later date.

The language in the proposed agreement, however, does not provide any details about those future negotiations. Instead, the agreement includes language that raises questions about whether the company would be obligated to negotiate. Language in the proposed agreement states: “it is intended that this Agreement and the PILOT payments contemplated hereunder constitute the only agreement relating to PILOT payments or similar payments that the Company will enter into and for the benefit of Douglas County …”

County officials have not said when the stormwater and agrivoltaics plans may be presented to county commissioners for approval. When asked Tuesday, Britt said the county and the Kansas Sky Energy Center team are working on those various agreements, and they will be brought to the commissioners when they are complete. However, she offered no timeline.

The Kansas Sky Energy Center’s future is clouded in other ways too. The project currently faces a lawsuit. The lawsuit – filed by Grant Township, the North Lawrence Improvement Association and over 20 other local businesses and individuals, alleges that the project doesn’t comply with the county’s comprehensive plan, and that County Commissioner Karen Willey has inappropriately worked behind the scenes to shepherd the project through the county’s approval process. The county has denied all such allegations, asserting that the plaintiffs are frequently misinterpreting texts and emails or using them to make misleading claims.

If that lawsuit is still pending at the time of the county giving final approval to the project, it is unclear if the project could begin. County staff didn’t address that issue in its memo to commissioners, but said the earliest the project is likely to begin producing electricity is 2027.

PILOT payments to the county would begin the following year. They would start at $200,000 per year for the first five years, and then gradually increase in size to about $255,000 in year 10. The agreement ends after 10 years, with the county noting that the state’s tax exemption is scheduled to end in 10 years.

However, if the state ultimately decides to extend the tax exemption past the 10 year period, the agreement calls for Kansas Sky Energy Center to pay $1.75 million per year for as long as the project is in operation. That $1.75 million amount would increase by 3% each year.

The County Commission’s business meeting will begin at 5:30 p.m. on Wednesday in the Douglas County Public Works training room at 3755 E. 25th St. The meeting will also be available via Zoom.