Following six months of negotiations between Willacy County and Duke Energy Company acting County Judge Aurelio "Keter" Guerra signed a contract with the company on August 9.

The judge's signature clears the way for the development of a 250 megawatt wind farm east of Sebastian in Willacy County. Guerra had been given permission by commissioners in February to negotiate the best deal he could with the North Carolina based wind company.

At that time 24,000 acres of farm land east of Expressway 77 on FM 1018 was designated as the Las Palmas Reinvestment Zone No. 1 and on August 9, 7,000 additional acres in the same area were designated as the Las Palmas Reinvestment Zone No. 2.

Much of the land in the two Reinvestments zones has been leased from farmers to build a windfarm with a capacity of 400 megawatts in Willacy County. The project will be built in two phases, and Phase 1 will have an estimated operating capacity of 250 megawatts, with Phase II coming on later, with an additional 150 megawatts.

In return for the $325 million initial investment the Duke Energy Company plans to make in the county, they asked the commissioners for a 10-year tax abatement on the 150 giant wind turbines they intend to install.

Earlier, the county signed an agreement with E.ON Renewab1e Energy Company allowing a 10-year tax abatement of 70 percent rather than the 75 percent abatement that Duke Energy insisted on. The question was debated for six months but last week the county authorized Guerra to make the best deal he could. And on Wednesday he signed the agreement allowing the 75 percent abatement.

The tax abatements will be for improvements such as buildings, and structures, machinery, equipment, electrical substations, underground and overhead electrical transmission facilities, wind powered turbines, transformers, electrical equipment, communications cable and anemometer towers to be installed.

DEGS WIND I, LLC anticipates that construction of Phase I will begin on May 1, 2011 and be completed by Dec. 31, 2011. Phase II will begin on May 1, 2012 and be finished by Dec. 31, 2012. The estimated value of Phase I will be $325 million and the estimated value of Phase II will be $175 million.

The company believes that 150-to-200 workers will be needed for two years of construction and have promised commissioners that efforts will be made to hire as many people as possible for these jobs.

Following the completion of construction five full-time jobs are promised in the contract signed by Guerra.

DEGS WIND I, LLC also agrees in the contract to buy as much goods and services as it can from local businesses, provided that the quality is comparable to that available elsewhere and that local prices do not exceed 105 % of the cost in other places.

Taxes will be Significant despite abatements:

With a total taxable value of $500 million even with a 75 % tax abatement for the first 10 years, DEGS WIND I, LLC expects to pay Willacy County $17.8 million in taxes over the 25-year life of the windfarm. And the owners of the land will continue to pay property taxes just as they have before.

Last week Milton R. Howard, vice-president, wind development, with Duke Energy, told commissioners that this particular area of the gulf coast has the best environment for wind farms that he has seen. Howard said that the wind here blows hard during the day while in West Texas the wind blows most at night. Daytime hours are the hours when peak energy usage takes place so the timing of the wind here is perfect, he said.

He estimates that the potential for wind farming by his company in Willacy County could reach 1,000 megawatts, which would make this area the largest wind farm in the state.

To sweeten the blow of tax abatements DEGS WIND I, LLC has agree to pay the county $275,000 by Dec. 31 of the year in which the financial deal closes. The county plans to use the money as follows: $200,000 for a county park; $50,000 for a county education center; $15,000 for a Boys & Girls Club and $10,000 for Pony League Baseball.

And during the second, fourth, sixth and eighth years of the tax abatement for Phase I, the Company agrees to pay the County $1,000 per megawatt times the total operating capacity of Phase I, up to a sum of $400,000 per year.

Finally, during construction the Company will make reasonable efforts to minimize the disruption to all public and County roads and repair any damage caused to public and County roads.

Greg Efthimiou of Duke Energy said, "This tax abatement agreement is a significant milestone in the efforts of Willacy County and Duke Energy to bring clean, renewable wind energy and economic activity to the region."

“Willacy County leaders deserve praise for working to bring renewable energy, economic activity and jobs to the area, and their diligence in reaching a deal that's mutually beneficial for the community and Duke Energy. “

Now that Duke Energy and Willacy County have an agreement, the last remaining step before construction of the project can begin is for the company to sell the energy that they will produce on a long term contract to a power company.

The owners of struggling Willacy County businesses, such as cafes, drug stores, furniture and appliance stores, motels and food stores can only hope that the company can find buyers for its electricity sooner, rather than later.