Arizona's first merchant plant will fire up this summer near Kingman. If this plant is any indicator of things to come, Arizona is in deep trouble.
Mohave County is on the verge of bankruptcy, thanks, critics say, to incentives and tax breaks given to the new Griffith power plant. The county's economic development board's dealings in the project are currently under investigation by the Arizona Attorney General's Office. The investigation should be finished next month.
The plant will be pulling all of its water from an aquifer that also flows under the residents of Golden Valley. Residents there were informed that county officials had made a deal with the plant's builders that gave the power plant first rights to the aquifer.
The plant will draw 8.4 million gallons per day from the aquifer, the equivalent of a city of 40,000 people. In effect, if the plant dries up wells around Golden Valley, the plant can continue to run and residents won't have water.
The Mohave County Economic Development Authority used county money to pay for the roads, water lines, wells and other infrastructure for the plant and the adjacent industrial park. However, because the development authority is a private corporation, county residents don't know how much county money went for the project.
Estimates range from $7 million to $10 million. Development authority officials won't give the figures.
The county budget in that time has gone from a $3 million surplus to a projected $3 million deficit. To raise money, the county has sold its courthouse and jail and is now leasing them back.
Accusations of financial impropriety are false, says Bill Goodale, executive director of the Authority.
And claims that the Griffith plant is a boondoggle are equally ludicrous, he says, noting that studies showed that Mohave County needed the power. And the county, he says, badly needed industry to prop up a sagging tax base.
The county's money problems, he says, are actually caused by the county's heavy population growth and subsequent infrastructure needs. He says the county needs more heavy industry, not less, to generate much-needed taxes.
"This power plant is a boon for the county," Goodale says. "There is no doubt we're doing something good for the county."
The Mohave County Economic Development Authority brokered other sweet deals for the power company.
The plant sits in what is called an "enterprise zone," meaning the plant will not have to pay sales tax on construction costs during its first year of operation.
In addition, thanks to a change in state law, the plant will also benefit from a state statute that was originally intended to help mom-and-pop entrepreneurs get started in the state. The amended statute will, in effect, cut the property taxes paid by the plant by 30 percent.
The companies that own the plant, Duke and PP&L, didn't need the help. Running at 80 percent capacity, the plant should have revenue of $1 million to $3 million per day.
Plant officials say they received nothing that other plants haven't received, according to news reports of the project.
The plant sits on land sold -- cheaply -- to the companies by Fred L. Dean. Dean was a founding member of the Mohave County Economic Development Authority. Dean now owns land by the plant.
The executive director of the Development Authority and lead promoter of the plant used to be Donald Van Brunt. But Van Brunt resigned from his position last year one month after it was discovered he had an 18-year-old felony conviction. In 1982, he had been convicted for conspiracy to manufacture $3.8 million worth of counterfeit Federal Reserve Notes.
According to testimony in the case, Van Brunt and an accomplice purchased a print shop in Santa Ana, California. The seller of the print shop became suspicious when Van Brunt, identifying himself as Mr. "Van Smutt," asked if the shop's cameras "could pick up very fine lines" and told the seller they "might have to board up the windows because they would be doing top-secret government work." A month later, Secret Service agents raided Van Brunt Enterprises Inc. Van Brunt quickly waived his Miranda rights, signed a sworn statement of his involvement in the scheme and named his accomplice.
After the revelation of his criminal past, the MCEDA board unanimously supported Van Brunt, issuing a statement that "This board, and the industrial organizations we represent, continue to maintain the greatest respect for Mr. Van Brunt."
"We supported him because he is a man of great vision," Goodale says. "He has done so much good for this county."
Van Brunt said he had paid his penalties to society for the crime and then accused political enemies of "character assassination."
Soon after Van Brunt's resignation, he was hired by Caithness to promote the company's proposed plant near Wickieup in Mohave County.
According to the residents of the tiny town, the power plant proposal has been one long series of cover-ups and half-truths.
"When we first met Van Brunt, he said he would bring all this wonderful development to Wickieup," says Corey Daniel, the owner of the town's Mobil station. "Then we asked what kind of development it was, and he said, 'Just come to the meeting.' When we got wind it was a power plant, people were just outraged.
"From that point on, they've been totally in-your-face and slam-dunk the whole way. Getting information has been like pulling teeth, and when we get the information, it's always different than what they were originally telling us."
In discussions with residents and in public hearings, Caithness and officials of the MCEDA have misrepresented both the pollution output and the water drawdown of the plant, critics say. Residents say they haven't been properly notified of public meetings.
Residents discovered that of the 1,200 acres Caithness had purchased for the plant, 1,000 of it had been given to MCEDA to do with as it chose.
That Wickieup plant proposal, called Caithness Big Sandy, first was filed with the county in August 1999.
It was approved by county supervisors, two to one, eight months later.
Supervisor Carol Anderson was the dissenting vote.
"The reason for my objections, along with the environmental issues, is the process," Anderson wrote. "The normal county process for such major changes to a community normally involve developing an Area Plan. That Area Plan process involves the community at numerous meetings and usually is an 18-month, or longer, process. . . . This expedited process eliminated the accepted and traditional County practice, the opportunity for community participation and studies on community impacts."
"It's horribly frustrating and disheartening to watch the political process there," says Pat Sherrill, who owns 40 acres near Wickieup. "It's all a fixed deal to the benefit of a couple people."
While the Caithness project sailed through local approval processes, though, it hit a snag in front of the Arizona Corporation Commission Power Plant and Transmission Line Sighting Committee.
During committee hearings, Dennis Sundie from the state Department of Water Resources chastised project promoters for trying to punch through such a massive plant with such sketchy environmental-impact research.
The plant has yet to be recommended by the committee. Sundie said he would not discuss any open power plant hearings.
"To the committee's credit, they were very adamant that they wanted the facts on the water withdrawal issue," says Jack Ehrhardt, a federal government renewable energy consultant. "They were the first to take the critical issues here seriously and ask some real questions."
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