A settlement has been reached in a lawsuit over millions of dollars in tax credits that were sought by developers of a proposed biomass power plant in central New Mexico that was once touted as part of the state's push for more renewable energy.
Officials with Western Water and Power Production LLC and the New Mexico Energy, Minerals and Natural Resources Department confirmed this week that an agreement was reached at the end of March and the case was dismissed.
Details of the settlement are confidential, but Western Water and Power has been allowed to reapply for the credits. If the proposed plant is operational by the end of 2013, the company will be eligible to receive the credits beginning in 2016.
The company sued last year over the state's decision to rescind $27 million in credits because of delays that pushed back construction of the plant.
David Cohen, co-owner of Western Water and Power, said he's encouraged that the settlement will clear the way for the company to attract financing for the $125 million project.
"Financing has been a big burden because of the overall meltdown in the credit markets. We're starting to see that easing now," he told The Associated Press in a phone interview.
The company has a letter of intent from interested investors and is working on completing its due diligence. If the investors sign on, Cohen said construction could begin as early as this summer.
It's been a long road for the proposed 35 megawatt plant.
Western Water and Power had made economic, political and regulatory headway after unveiling the project planned south of Estancia in October 2003. Former Gov. Bill Richardson's administration even included the plant on a list showing progress in developing alternative energy projects.
But the company ran into trouble while trying to obtain an air permit and the tax credits from the state, and some residents and environmentalists voiced concerns about the project's potential impact on air quality and New Mexico's forests. The proposed plant would be fueled by wood and forest byproducts.
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