Darrell Smith, Connersville News-Examiner Reporter
The determining factor in whether a proposed ethanol plant and agri-energy park near Glenwood becomes a reality is water. Without it - or a plan to get it there - the project could die, local officials learned Tuesday.
The officials discussed how to fund a water line to the proposed site at an informational meeting called by the Eastern Indiana Development District.
Whitewater Valley Ethanol principals Steve Hogan and Troy Flowers met with representatives of the Fayette County Redevelopment Commission, county commissioners, county council and Connersville City Council as well as Connersville Mayor Max Ellison, Utilities Director Harold Ellison, bond counsel, the commissioners' attorney, financial advisers and two project investors. Ryan Asberry, assistant vice president of the Indiana Economic Development Corp., participated by telephone.
Nancy Kinder, executive director of the EIDD, said the investor group was scheduled to meet today to make a decision about whether to continue with the project in Fayette County or move it to another Indiana location.
Without a plan to finance a water line to the proposed site, Kinder said Fayette County would lose the $215 million investment and any hope of obtaining the additional $230 million investment that could follow. The scope involves several hundred jobs, according to officials.
"We can afford $700,000 a year for water," Hogan said. "We cannot pay more or we will abandon the project. It's unfortunate there wasn't water there or we wouldn't have this problem."
Hogan said most ethanol plants do not have water costs nearly as high as Fayette County and that fact places the proposed plant in a less competitive financial position.
Two engineering estimates for installing the water line to the site were obtained and both were $15 million, Harold Ellison said. The $15 million figures in the cost for a 30-inch line, which includes enough capacity to provide water to customers along the path of the water line and for Glenwood and Orange, he said.
Asberry said the IEDC could only commit to funding for the project based on a formula: number of known direct jobs at $5,000 per job. The ethanol plant would employ only 55, although proposed ancillary projects could employ several hundred people.
Kinder said she had earlier conversations with the Indiana Finance Authority about obtaining a no-interest loan that could be used to fill the gap funding. That option will be pursued.
The city of Connersville has proposed funding the upgrade from the 24-inch line required for the ethanol plant and the adjoining agri-energy park to the 30-inch line for $3.5 million, Mayor Ellison said. He reminded Asberry that Fayette County has historically had the highest unemployment rate in the state and the ethanol project could not only help reduce that rate but could provide water to Orange, which badly needs a new water source.
To fund the extension, water rates would have to increase temporarily, said Chad Lee, president of the Fayette County Commissioners. Once the ethanol plant and ancillary businesses start up and begin using water, that rate would come down, he said.
Kinder said she would meet with the Indiana Finance Authority concerning an interest-free loan.
She announced she had received a letter of intent from a methane recovery company to locate at the site, brining with it a $25 million investment. The EIDD is still waiting for the letter of intent from a larger company that would locate in the agri-energy park, she said.
If water is extended to the site, that will open up all of western Fayette County and eastern Rush County to development, she said.
Hogan said everyone in Fayette County is doing all they can to get water to the site, which would attract ancillary businesses to the site. He said the investors probably could wait until information is obtained on the no-interest loan but they can't wait much longer because the cost of the plant will continue to increase.
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