Sherburne County officials are re-thinking the county’s ordinance that governs solar farms.

 

At a workshop Tuesday, Zoning Administrator Nancy Riddle asked the board to consider language changes to the ordinance because of the way ownership of solar farms keeps changing.

 

Last year at the request of solar farm developers, the county amended its ordinance regarding interim use permits (IUPs). The issue was ownership. Developers argued that ownership of solar farms changed every time new investors bought an interest in the facility.

 

Under previous ordinance language, a new IUP would have to be applied for every time there was an  investor change. The new ordinance allowed for changes in ownership interests without a new IUP.

 

But since then, the ownership turnover has been fast and furious, said Riddle.

 

“Some of the them have changed two or three times, and none have even been built yet,” she said. “It’s getting kind of strange. We can’t always figure out if the company has changed.”

 

The main issue is the escrow account for each solar farm. To cover the cost of future decommissioning of the solar farms, the county requires a cash escrow at the time a building permit is issued. The remainder of the escrow is in the form of a letter of credit, which is paid off incrementally over time.

 

Riddle said it isn’t always simple to determine who is responsible for the letter of credit if ownership keeps changing.

 

“They don’t always change the name,” she said.

 

Assistant County Attorney Tim Sime said under the ordinance, the owner can’t change but ownership interest can change without having to apply for a new IUP.

 

“We were told banks would invest money, but the main party would stay the same. But that’s not what’s happening,” he said. “They’re being changed wholesale. The company that has the permit is still the same, but the owners are being swapped out 100%.”

 

Sime said that causes problems with financial security. If the company holding the IUP is just a “shell” and the financial security is tied to the investors, if the investors keep changing, how can the county be assured the financial security is valid?

 

“If you have a main owner there and that main owner stays and posts the letter of credit, that’s one thing,” he said. “But to track each individual investor that comes in and ask to replace the letter of credit, that’s the difference.”

 

What staff was proposing was two options. Either require the entire escrow in cash if the IUP is transferred to new investors, or limit the transferability of the IUP once the building permit is issued and the letter of credit is posted.

 

“It’s the money behind the company that we’re worried about,” said Sime.

 

Members of the board agreed something should be done to protect the county and assure there would be valid financial security behind each solar farm.

 

Commissioner Felix Schmiesing said he wanted to be sure they didn’t make it impossible for companies to build solar farms in the county.

 

“I’d like to see us not get a lot more restrictive just because it gets difficult for us,” he said.

 

Riddle said requiring a 100% cash escrow up front might cause a hardship, especially with a $25,000 per megawatt price tag.

 

Sime said the county should try to make a decision before permits were pulled so it wasn’t changing the rules for some owners.

 

He said another option would be to tighten the language to require that a new letter of credit be issued before any permit is transferred.

 

The ordinance with new language will be brought before the board at an upcoming meeting.