VALDOSTA —
The Valdosta-Lowndes County Industrial Authority plans to send a petition to Lowndes County Superior Court to sue Wiregrass Power, LLC, for a clear title on the land purchased for the development of a biomass energy plant.
The Authority believes Wiregrass defaulted on a lease agreement to build the plant, placing ownership of the 22.22-acre tract back in their hands, but Wiregrass denies the allegations. This denial casts “a cloud” of suspicion on the Authority that may prevent it from re-marketing the property, according to the petition, leading to the suit.
Under the original lease, construction of the project was to begin no later than June 1, 2010. That date was amended to June 1, 2011, when Wiregrass approached the Authority citing difficulties acquiring a power purchase agreement with Georgia Power, Project Manager Allan Ricketts said.
“That was a critical piece (of the construction) because if you’re going to produce 40 megawatts of electricity, you have to sell it to an industry,” Ricketts said.
The Authority allowed the extension, provided Wiregrass built a solar voltaic power plant to complement the biomass facility. Wiregrass complied with its end of the bargain, Ricketts said, building the solar plant on two acres of the 22-acre lot, but faced further difficulties achieving an agreement for the biomass plant.
The Authority attributed the difficulty to a supply-and-demand issue. An agreement for the solar facility was easier to make due to a lower energy price; energy from a biomass facility costs between 13 and 16 cents per kilowatt hour while energy from a solar facility costs between eight and 10, Ricketts said.
Wiregrass approached the Authority on May 25, 2011 with intent to purchase the property five days prior to the
deadline, knowing they would be unable to meet it, the petition states. The lease with the Authority stipulates that Wiregrass retains the right to purchase the land for $200,000 “at the end of the lease term or upon any termination thereof as provided therein.”
The Authority denied Wiregrass the purchase, citing that the company was in default prior to the date, due to a “failure in performance,” the petition states.
Because of this failure, the Authority “believes that ... Wiregrass ... no longer intends to construct a biomass generation facility on the property, and presently has no immediate plans to build on the property,” according to the petition.
In June 2011, the Authority informed Wiregrass of the default and gave the company notice of termination of the agreement, as well as a new offer, said Steve Gupton, attorney for the Authority.
“We wanted to try to get them an agreement to develop as a non-biomass site, and we entered into a side-letter agreement to do that until December 2011,” Gupton said.
But the Authority never received any “concrete notice” from Wiregrass that it planned to build the second solar facility, Gupton said.
The suit is necessary to clear the land title and allow the Authority to move forward with a new agreement, Gupton said. The Authority will likely pursue the expansion of the solar facility.
Wiregrass denies any allegations that the Authority has made regarding the agreement, and that the company will address the allegations “at an appropriate time,” Wiregrass attorney Kevin Moore said.
“We are not in default,” Moore said. “We complied with every deadline.”
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