County eyes abatement extension for Plug Power

County Commissioners voted to hold two public hearings to allow Plug Power to renew its tax agreement with the County for the hydrogen plant it is building near Graham, and whose tax revenue Olney Hamilton Hospital is counting on for its new hospital project.

Plug Power’s tax abatement agreement with Young County was set to expire because the energy company did not meet the deadline or a one-year extension to have the plant substantially completed by March 31.

The company, which is building a network of six hydrogen plants across the United States, ran into financial trouble last year but has recapitalized with stock sales and a $1.6 billion loan from the U.S. Energy Department, Judge Win Graham told Commissioners at their March 25 meeting.

The company has asked to amend the tax abatement to move the completion date to March 31, 2026 and to begin making payments this year, he said.

To approve the amendment, Commissioners must first renew the County’s tax abatement guidelines at a public hearing set for April 8. At a May 13 public hearing, the Commissioners will address a proposed amendment to the existing agreement, which extends the abatement to 2033, with Plug Power making payments each January. The company made a pilot payment in January of $294,000, which would count as the first of ten payments under the proposed amendment, Judge Graham said.

“They are paying us basically $300,000 a year,” Judge Graham. “It’s a good deal for Young County because we will be out from under that abatement in year seven of that plant being operational.”

Plug Power has begun construction on the concrete bases for the towers for an electric line to bring power to the plant from a nearby wind farm, and has re-established a plan with the City of Graham to move water from the Graham wastewater plant via a pipeline to the plant.

“They tell me they are committed to this plant,” Judge Graham said.

The plant is expected to create 45 tons of hydrogen per day. The company believes the plant will be finished by March 31, 2025, Judge Graham said.

In March, local voters approved the sale of $33 million in general obligation bonds to fund a new hospital on the understanding that the bonds would be repaid with tax revenue from the Plug Power plant and two wind farms in the hospital’s taxing district.

The hospital sold $27 million in bonds last month - reserving the final $6 million until the hydrogen plant is substantially complete, OHH officials said. The Newcastle Independent School District also was counting on the hydrogen plant tax revenue to expand its stadium and track and campus.