House panel approves new financial hurdle for some solar, wind projects

A House panel voted Friday to erect a new financial hurdle in the path of some future solar and wind projects in Arizona.

But proponents say it is necessary to preserve cattle ranching in Arizona.

HB 2411 would make it illegal to construct either solar or wind operations on state or federal land that is currently leased for grazing. It would, however, allow a project to continue — but only if the rancher holding the lease would be compensated by the new occupants for loss of profits.

Most significant, the measure approved on a 5-4 margin by the Committee on Transportation and Infrastructure has no cap on the amount that would have to be paid — and for how many years. And Mike Gardner, lobbyist for the Arizona Solar Energy Industries Association said that, as worded, HB 2411 would require those payments to continue “in perpetuity.”

The vote followed the testimony of Safford rancher Mark Brawley, who said there already has been an application by a solar company to lease 20,000 acres of land from the Bureau of Land Management on which he currently has a permit to graze cattle.

He pegged his anticipated future financial loss from losing that much land at $2 million. Beyond that, he said the loss of that acreage, about 30% of his grazing, might make the operation run by his family for generations no longer financially viable.

“It’s not anti-solar,” Jeff Eisenberg, lobbyist for the Arizona Cattle Growers Association, said of the measure.

“We just want to have some fairness to these people who have been around a long time,” he told lawmakers. “Why not stand up for the dignity of the men and women who make a living on the land?”

But Stan Barnes, who lobbies for Interwest Energy Alliance, said there’s an important fact being left out of the discussion.

He said the issue here is the land belongs to — and is leased from — the government. And Barnes, whose family has a history of farming in Pinal County, said once someone offers more money, there is no obligation by the new leaseholder or purchaser of the government land to compensate the prior occupant for future lost profits.

“When home builders come to take it from us, we get nothing,” he said, other than reimbursement for infrastructure like wells.

“But we don’t get perceived profits in the future,” Barnes, a former GOP legislator, told lawmakers.

This legislation, he said, would create a special privilege for ranchers.

“What kind of Republican-oriented thinking is that?” Barnes asked.

And Sandy Bahr, Arizona chapter president of the Sierra Club, said there’s something else. She said it interferes with the legal obligation of the state Land Department to get the most money possible from the leasing of state lands, as the proceeds go to supporting public schools and other government functions.

The battle in some ways comes down to a question of preserving a historic lifestyle in the face of possibly incompatible changing technology.

There are some wind projects in Arizona. But the bigger potential is for solar given the number of days of sunshine and the amount of available land.

In either case, developers often look to place their projects near existing high-tension lines to have a way of moving their power to where there are buyers.

Those lines, however, often are in areas of the state where land now is being leased to ranchers. And that results in those developers outbidding the ranchers for the use of that property.

“Ranchers have come to us and told us these projects are going to take out their operations,” Eisenberg said.

“We’re responding to a human need here,” he said. “You’re taking out businesses and families and communities that have been in place for years.”

Rep. Marcelino Quinonez, D-Phoenix, said he understands the issue.

“Ranchers should be compensated,” he said.

“But the argument with this bill is it’s particularly outlining a solar or wind-energy project,” Quinonez said. “Is the bill not going directly after a particular business entity to operate in Arizona?”

He said he might be more sympathetic if those particular words were removed.

“It levels out the playing field,” Quinonez said.

Eisenberg, however, said that these solar projects have become “a real problem.”

“We’re not like making this up and saying, ‘Oh, we don’t like solar, we don’t like wind,”’ he said.

But amending the measure to expand who would have to compensate ranchers beyond wind and solar projects may not be politically feasible. It could provoke new opposition from commercial and residential developers, who would then face additional financial hurdles for their own projects.

And it still doesn’t solve the legal problem that whoever wants to lease these properties likely would be willing to pay more than what the ranchers are charged — and that the Land Department is required to accept the highest bid.

Bahr cited figures from the Land Department, which said it collected more than $54 million from the leasing of public lands.

“Of that, only $2.2 million came from grazing,” she said, despite the fact that grazing leases cover nearly 88% of state trust lands.

“So livestock grazing is not doing much for the trust beneficiaries,” Bahr said. “Commercial leases, on the other hand, generated $33 million on just 74,000 acres of state land.

But Rep. John Gillette, R-Kingman, who voted to support the measure, said he fears that these projects will seek to locate near the cities they hope to power.

He figures that it would take 300 acres of solar panels to create enough energy for a community of 5,000.

“So if you multiply that out for, let’s say, the city of Kingman, you’re going to be well over a thousand acres in land mass to power that,” Gillette said. And that, he said, could eliminate “prime grazing land” around the city.

“A thousand acres in land mass would devastate every rancher I know just to power a city the size of Kingman,” Gillette said.

Bahr said that ignores the fact there are millions of acres of state trust lands in Arizona. And that, she said, doesn’t count land owned by the U.S. Forest Service or Bureau of Land Management.

“So there’s a lot of areas that would not be under any kind of solar leases or permits,” Bahr said.

Gillette remained unconvinced, saying that those areas are rarely used because of the terrain,” he said, with a lot of that above 4,000 feet, which he said is not suitable for grazing.

The measure now goes to the full House.