Hamilton considers amended utility agreement with 80 Acres Farms

Company has doubled its initial anticipated energy use at Enterprise Park facility.

Hamilton will consider later this month an amendment to the city’s economic development agreement (EDA) with 80 Acres Farms.

The city and 80 Acres Farms entered into the EDA in October 2018 to encourage job growth, and it also addressed increased electric consumption. Hamilton owns and operates gas and electric utilities, as well as other water and sewer utilities.

The agreement indicated 80 Acres Farms would operate five facilities in the city with a set minimum usage and annual energy consumption across all buildings and minimums at each building. The company has actually doubled its initial anticipated energy use at its 17,000-square-foot Hamilton Enterprise Park facility.

The company had planned to build five facilities at the time of the agreement but currently has four (three planned and one unplanned facility).

In exchange for providing increased electric usage and jobs within Hamilton, the city would spend approximately $856,000 to provide service to all locations, including transmission, distribution and metering equipment at no charge to 80 Acres Farms.

Also, the city would provide five years of electric bill credits based on kilowatt-per-hour usage to 80 Acres Farms if all performance requirements were met for the prior year.

“They’re using a considerable amount of energy, and also, that energy load has exceeded what they anticipated for those three original facilities,” said Nate Perry, Hamilton director of Business Services.

80 Acres Farms is a vertical indoor farm that produces chemical-free salads, microgreens, herbs, cucumbers and tomatoes, which are available at retailers including Kroger, Whole Foods, The Fresh Market, Jungle Jim’s International Markets and Dorothy Lane Market.

Their products are also available through food service distributors, such as Sysco and US Foods. This approach requires climate controls and artificial lighting, among other things, that all require electricity.

The company has constructed three planned buildings in Hamilton and constructed one unplanned building. The three planned buildings are in year four of the five-year agreement, and the unplanned building is in year three of the five-year agreement.

“Continued growth of this large user is beneficial to all of our electric customers and to the community through job retention and growth,” Perry said.

Hamilton staff is proposing to modify some of the terms of the agreement designed to encourage further growth of Hamilton’s second-largest electric user. The proposed changes, which would be effective this year, include:

  • applying the incentive credit on a monthly basis rather than annually, though all performance metrics will still be required;
  • applying the total applicable incentive credit due to the three locations entirely to the 17,000-square-foot Hamilton Enterprise Park facility, but the total dollar amount of this incentive would not change;
  • condensing the total applicable incentive credit schedule from three years to one year for the Hamilton Enterprise Park facility. The total dollar amount of this incentive credit will not change; and
  • adding an additional incentive to rebate for the next two years the kilowatt-per-hour tax.

City Council will consider two readings of the legislation at its Jan. 25 meeting, as well as a vote on the amended agreement.

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