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ConnectGen looks to install 500-MW solar project in southeast Texas

Houston-based renewable energy developer ConnectGen LLC wants to build an up to $500 million, 500-MW solar farm on a 2,000-acre plot in the Lone Star State's southeastern corner. But the project hinges on the approval of certain tax breaks that ConnectGen said are "critical" to its success, some of which the developer already has sought through a tax incentive application filed recently with the Texas Comptroller of Public Accounts.

In that application, ConnectGen subsidiary CG Leon County LLC requested an appraised value limitation from the Normangee Independent School District for the company's initial installation of about 150-MW of solar capacity in Leon County, which lies between Houston and Dallas. In a second and final phase of the Pecan Prairie Solar Project, ConnectGen plans to install roughly 350 MW in the Leon Independent School District, according to ConnectGen CEO Caton Fenz.

As part of the first phase, the developer also would build "a high-voltage electrical substation, medium-voltage underground electrical collection lines, gravel surface string roads to facilitate construction and maintenance, [and] an on-site maintenance building," among other infrastructure.

Two interconnection requests were submitted to the Electric Reliability Coordinating Council in June 2019, and full impact studies for both phases are underway, according to the incentive application. ConnectGen aims to begin construction in 2021, with operations starting by mid-2022 for the first phase and by the end of 2023 for the second phase, Fenz said.

Fenz declined to disclose whether an off-taker for the facility's output had been identified or whether the developer was in talks with any potential purchasers for the power. While the company intends to build and operate the project, it will "remain flexible and open to potential sales if there is market demand" for the Pecan Prairie facility, Fenz said.

But none of this will happen if the Normangee Independent School District does not approve the appraised value limitation application, known as a Chapter 313 request. So while the company expressed excitement about tapping into the "high quality energy resource" available in Leon County, it tempered that enthusiasm with realism.

"The Texas power market is highly competitive ... and renewable energy projects that do not secure approval of Chapter 313 Appraised Value Limitation Agreements to manage long-term property tax obligations cannot compete against projects located in other counties in Texas that have secured these agreements," ConnectGen said. "Without this incentive, the Pecan Prairie Solar Project would not be competitive in securing the long-term renewable power purchase agreement that is required to attract third-party financing and make the project economically viable, and ConnectGen would be forced to redirect investment to other opportunities."

Texas is not lacking in solar-powered energy capacity; its solar industry in 2019 was ranked fourth among the states with respect to installed capacity by the Solar Energy Industries Association, or SEIA, the sector's national trade group. According to SEIA's state-by-state map of the U.S. solar industry, 298 solar installers or developers were operating in Texas as of the fourth quarter of 2019.

That year, Texas generated enough solar energy to power 498,637 homes, according to SEIA. If it comes to fruition, the Pecan Prairie project alone will add another 50,000 Texan homes to that total, the developer said.