San Angelo City Council will consider approving an 85% tax break for three years for the Zeppelin Energy Storage project on 28th Street. A private equity firm, Peregrine Energy, is behind the project.
The tax abatement agreement has a start date and an end date.
“Effective Date” shall mean the day after the later of the full execution hereof by all of the Parties.
“Expiration Date” shall mean March 1 of the calendar year following the expiration of the last of the tax abatements provided herein.
There is no ten year term with a commitment by Peregrine to pay $4.1 million for years 4-10. Future taxes will be based on value of the asset in year four.
The IRS allows accelerated depreciation (five years) for some energy projects:
Owners of qualified facilities, property and energy storage technology placed into service after December 31, 2024, may be eligible for the 5-year MACRS depreciation deduction.
Council persons should recognize the projected ten year tax revenue may not materialize as they consider offering the Zeppelin Battery Storage project a massive 85% three year tax break.
City Council may wish to consider other obligations such as retiree healthcare. Last year Council decreased health benefits for retirees, impacting those with the least ability to pay greater "out of pocket" costs. They may desire to reverse that change with Zeppelin tax proceeds.
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