RIO GRANDE CITY — Starr County commissioners approved a $140,000 payment from Duke Energy, a company that constructed three wind farm projects in the area, as part of a settlement agreement.
The settlement was the conclusion of a legal dispute over the tax abatement agreement.
The county filed a lawsuit against DEGS Wind, subsidiary of Duke Energy, for breach of contract.
The official contract states the abatement will be at 85 percent for 10 years; however, the county alleges the two entities had previously agreed the abatement would be a sliding scale over a decade.
In support of that, the county provided a copy of an email between Robert Peña and Rose Benavidez, president of the Starr County Industrial Foundation, in which Peña stated Duke had agreed to the 85 percent scale abatement.
The bulk of the discussion, Benavidez said Wednesday, focused on the tax abatement for 2016 and 2017, the first two years of the 10-year agreement.
“What basically was in question were the years that had passed and the current year,” she said. “Moving forward there was an agreement to maintain a scale that both parties were agreeable to.”
As part of the settlement, Benavidez could not disclose particulars of the agreement but stated, “It was a mutual agreement that both parties felt rectified any outstanding issues.”
“As part of the agreement obviously there was compensation that was agreed upon that would be made payable to the county,” she said regarding the payment approved by the county commissioners Wednesday. That payment was only the first installment; however, Benavidez could not disclose the full amount of the settlement.
“As a county that is moving forward in recruiting and expanding the alternative energy sector in our community, this experience has really served as a valuable lesson in how we negotiate and move forward with these companies,” Benavidez said. “We’re looking forward to continue having Duke being a great corporate partner for our region.”
The county has already agreed to two more abatement agreements with other companies.
The first, which has already been approved, is with a company that will be procured by Longroad Energy, a renewable energy developer based in Boston.
The second, which is in the final stages of being approved, will be with Bordas Renewable Energy, which will have two wind projects and a solar project in Starr County.