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County approves decommissioning agreement for solar project; debate centers on letters of credit vs. bonds
Summary
The Livingston County Board approved a decommissioning agreement for a solar project (case SU 14-23) after discussion about whether financial assurance should be an irrevocable letter of credit, a bond, or allow either instrument. The board approved the agreement pending final attorney review.
The Livingston County Board approved a decommissioning agreement for a solar project (case SU 14-23) at its Feb. 13 meeting after members and the county attorney debated how the county should require financial assurances to cover decommissioning costs.
Mike Haig, chair of the Agriculture and Zoning Committee, presented the item and asked the board to approve the agreement. After legal questions from board members, County Attorney Dan Regner said the county ordinance lists acceptable instruments for financial assurance, such as a letter of credit or a bond, but does not mandate a single preferred method. "Our ordinance doesn't have a preference between those two," Regner said, adding that both instruments "offer financial assurances to the county." He also cited a higher-level provision referenced during discussion — identified in the meeting as "4412" — and said the county could not demand more restrictive assurances than those in that referenced authority.
Board members raised practical questions about bonds and letters of credit. One board member asked whether an existing bond would allow the county to access funds midterm if the developer failed before the bond matured; Regner explained there are technical differences between instruments but that both can be drafted to provide assurance. County staff member Gina pointed out that, in the draft decommissioning agreement, section 1.2 states that financial assurances "shall take the form of an irrevocable letter of credit from a credit worthy party," a clause noted in committee discussions and highlighted in the draft.
Regner told the board this is the county's first time formalizing the decommissioning agreement in this form and that the draft had been prepared with input from outside counsel, including Andy Kite of the law firm Heil Royster. He also said the developer had not yet seen the final draft.
A motion to approve the decommissioning agreement, as drafted with the "or" language to allow either an irrevocable letter of credit or a bond and pending final attorney review, was made and seconded. The board approved the motion by roll call; the chair announced the motion passed.
The approved agreement formalizes the county's expectation that developers estimate decommissioning costs for county approval and provide a financial assurance mechanism. The board's action was explicitly made "pending final attorney review and approval."
