Despite delays, hydrogen plant to pay taxes

The owners of a planned hydrogen production facility near Graham told Young County Commissioners that the project will break ground in June after supply chain issues delayed the start of construction. In the meantime, they said they will make good on tax payments that Olney Hamilton Hospital is counting on for its proposed expansion.

PlugPower Holding Co. executives appeared at the May 22 Commissioners Court meeting to provide an update on the $600-million hydrogen plant. In March, the Commissioners voted to grant a one-year extension to the project, which will pay taxes to the Olney Hamilton Hospital and Newcastle Independent School District. The company attributed its difficulty in keeping to the schedule to labor and equipment shortages.

Plug Power was supposed to have its plant “substantially completed” by March 31 and operating by December of this year in order to receive a county tax abatement, but it has yet to break ground on the facility five miles west of Graham.

“I know we had set some expectations on behalf of Plug with the community as far as when this project was going to be built, mainly for tax purposes, for revenue as it relates to the Olney hospital district and Newcastle ISD,” Andrew Temple, director of Government Affairs for Plug Power, said. “There were some expectations that we were going to be making our payments in January. We still want to do that so even though our project is going to be delayed … we want to come in on the front end and make our payments early, just so our project being delayed doesn’t impact anybody’s budget season.”

OHH Chief Executive Officer Michael Huff said he was pleased with the company’s decision to pay the hospital taxing district, as the funds will be crucial to the facility’s plan to replace and expand its 1960s-era building.

OHH is the oldest rural hospital in Texas and one of a handful to operate profitably, but it could not afford its renewal plan without revenue from the hydrogen plant and the new wind farm that will power it.

“We are delighted to hear of Plug Power’s decision to make early payments,” Mr. Huff said. “The construction of this plant will certainly benefit the residents of Young County.”

Mr. Temple said the company also would work with Newcastle whose voters recently passed a $22-million bond issue to upgrade its school facilities “to make sure they have what they need from us … so they can accurately plan there too.”

Newcastle ISD Superintendent Shane Mallory said the school district had taken into account any delays in the plant’s construction schedule. “Throughout the bond election process, we shared with the Newcastle community our intention to structure the bond so any potential delays in Plug Hydrogen revenues are accounted for,” he said. “We continue to get word that they will be up and running, but we did not want to burden our taxpayers with uncertainty.”

The plant, named Project Limestone, aims to establish a 45-ton-per-day hydrogen production facility as part of a nationwide network of facilities to support the growing demand for hydrogen fuel cells across various applications. Project manager Mark Hannifan said “early works construction begins in June 2023” followed by construction of the facility in the third quarter of 2023.

The company was planning on an 18-month construction schedule but construction manager Brian Moore told the Commissioners it would likely take less time once ground was broken.

He also said the company has “worked extensively with [the Texas Department of Transportation]” to develop and get approval for a traffic management plan to address residents’ concerns about construction-related traffic and the 10 or so tanker trucks per day that will haul liquified hydrogen down Farm-to-Market Road 209 to the Dallas-Ft. Worth area.

The Graham plant will supply hydrogen gas and liquid to fuel cell-powered equipment like forklifts and tugs in warehouses. These fuel cells produce zero emissions, making them environmentally friendly and ideal for indoor applications, Mr. Hannifan said. The facility’s production capacity will require approximately 150 megawatts of power per day, which will be supplied by the Young County Wind Project, a 500-megawatt facility located west of town. PlugPower also plans to build a 14-mile