Supervisors expected to approve so-called "sun-tax" lawsuit today

Clean energy producers suing Riverside county claiming per-acre project fees are really an illegal tax

POSTED: 06:21 AM PDT May 21, 2013    UPDATED: 06:21 AM PDT May 21, 2013 
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RIVERSIDE, Calif. -

Riverside County supervisors are expected to sign off today on a proposed settlement to end a lawsuit challenging a county policy mandating that solar power developers pay per-acre fees for projects on county land.

The Independent Energy Producers Association and the Large-scale Solar Association worked out an agreement with county attorneys that was certified Wednesday by a Superior Court judge and will be considered by the Board of Supervisors as part of its policy agenda this morning.

"This tentative settlement preserves the right of Riverside County to be properly paid for the use of thousands of acres of our desert by solar developers," board Chairman John Benoit said in an online statement last week.

"This agreement will benefit Riverside County for years to come and will give solar developers certainty about the cost of using Riverside County's resources."

Under the negotiated deal, the county will slash the per-acre fees imposed on solar power developers from $450 to $150. However, the county will also scrap incentives that were enshrined in the original policy to reduce developers' expenses, and will also mandate a 2 percent annualized increase in fees for as long as county property is in use by a solar electricity generator.

In exchange for chopping the per-acre fees by nearly 70 percent, solar developers will take steps to ensure the county's full receipt of sales and use taxes associated with construction of a project, according to the agreement.

The Independent Energy Producers Association and the Large-scale Solar Association jointly filed suit in February 2012 in response to board policy B-29, which the board enacted in November 2011 to ensure the county was compensated for utilization of land that might otherwise go toward farming, recreation and housing.

Benoit also pointed out that solar farms would ever-after mar desert landscapes.

The plaintiffs equated the per-acre fees to an illegal "sun tax," arguing that the monetary charges violated  Proposition 26,  the "Stop Hidden Taxes" initiative approved by voters on Nov 2, 2010, as well as the state Mitigation Fee Act of 1987, which permits local agencies to charge developers for the use of public services -- but only to compensate for a specific project impact.

According to the IEPA and LSA, the county needed voter approval before implementing what amounted to a tax. The county argued the fees tied to the franchise and development agreements that solar power providers would be required to enter into as a condition of operating in the county were analogous to the payments required of traditional power plants when they used county resources and rights-of-way.

At the time of B-29's implementation, more than 20 solar power projects were in the works in the desert spanning the Coachella Valley to Blythe. Since then, several have been delayed or suspended altogether.

According to county officials, Riverside County contains 200,000 of the roughly 300,000 acres in California eyed for solar development.

According to the county Transportation & Land Management Agency, a typical 50-megawatt photovoltaic plant requires 250-350 acres of land, while a gas-fired power plant needs about one-tenth that amount of turf to produce 16 times as much electricity.

A county-commissioned report by David Kolk of Complete Energy Consulting LLC estimated the county would rake in about $160,000 annually -- before rebates -- from a typical 50-megawatt solar provider operating on a 250-acretract. That figure, however, was calculated using a per-acre fee of $640, which is what the county originally proposed before outcries during public hearings led the supervisors to agree on a lower amount prior to ratifying B-29.