El Cabo wind farm construction halted

The construction of the massive El Cabo Wind Farm in southern Torrance County is expected to miss the December 2015 deadline to receive the wind energy tax credits after delays with transmission companies caused the project to come to a standstill, said Mark Stacy, director of Iberdrola Renewables.

“Construction efforts have stopped after careful consideration,” he said. “Now the work I’m doing is to get the project ready for resuming construction as soon as we get things squared away. There were some delays to the schedule that we didn’t anticipate and that were completely out of our control.”

Only two energy companies hold transmission lines to California, Stacy said, and they are embroiled in an issue between themselves and are tied up with the Federal Energy Regulatory Commission, making their future operations uncertain.

“Without having assurances the transmission will be there or when it will be there it’s impossible for us to continue,” Stacy added.

“The transmission lines are long and skinny, and the only way to go to from point A to point B. If more transmissions were available that would ease our problem I’m sure. For now, though, it’s a one shot deal.”

Iberdrola will not continue with the construction – or formalize the increase to the industrial revenue bond with Torrance County passed last May – until it is certain the pieces are in place to finish the project. However, Stacy said he is hopeful the federal government will authorize an extension for the tax credit.

“I’m really hopeful they will extend (the deadline), but if they don’t, we’ll have to look at different ways to make the project successful,” he said. “Or we’ll have to change the strategy to deliver power a different way. It would really cause problems if they didn’t extend it not just for this project but for entire wind industry.”

Stacy said there were still too many variables left to determine the future time frame for the project’s completion.

If El Cabo doesn’t get built, Torrance County and local schools would not receive the payment in lieu of taxes they negotiated with the company. Last August the entities worked out a deal stipulating the county will get 60 percent of roughly $30 million over 30 years and the remaining 40 percent will be divided by Estancia Municipal School District and Vaughn Municipal Schools – with another 40-60 split between the two.

While the construction has stalled, Iberdrola continues to pay rent to the State Land Office and private landowners.