CE&P gets $3.1 million tax credit for job creation

By Susanne Retka Schill | July 03, 2014

California Ethanol & Power LLC in southern California landed a tax credit from the California Competes Tax Credit Committee worth $3.1 million through 2018, if the company successfully meets the milestones in the contract. CEP is developing an integrated energy campus at Brawley, California, near the Mexican border. The $530 million project will produce 66 MMgy of ethanol from sugarcane and sweet sorghum, 50 MW of electricity, of which 36 MW goes to the grid, and 930 million cubic feet of pipeline quality biogas, according to CEO David Rubenstein.

“Everything is in place,” Rubenstein told Ethanol Producer Magazine. “We’re ready to go, except for the final financing. We’re still pretty confident the Brazilians are going to finance us, but we’re looking alternatives if it continues to go slowly or falls through.”

The announcement of the tax credit has helped raise the visibility of the project in California, he added. “The governor’s office has seen our project, and is getting excited,” he said. The 222 jobs expected to be created inside the fence at the energy campus, plus the 150 or so in the agricultural operations outside the fence, will make a big impact on unemployment. “This area has the highest unemployment in the state at around 25 percent,” he explained. “The whole valley has a population of about 130,000, so our plant will have an impact.”

CEP was in the inaugural round of 29 companies receiving a total of $28.9 million in tax credits from the California Competes Tax Credit Committee.  “These credits provide significant incentives for companies to invest, create jobs and strengthen California’s economy,” said State Treasurer Bill Lockyer, a member of the California Competes Tax Credit Committee. “Unlike some tax incentive programs, this one has a competitive selection process and requires real accountability from businesses. To be awarded credits, companies must demonstrate how the credits will help create jobs and then make the investments they promise.” The tax credit is part of the Governor’s Economic Development Initiative enacted last year.

Permits are in place for the project, which received final county approval last fall. Uni-systems do Brasil Ltd is the lead engineering and procurement contractor and was to help with Brazilian financing. Offtake agreements are in place with Shell Energy North America for the ethanol, power and biogas. About 100 acres of seed sugarcane is in the ground, Rubenstein added, that will expand to more than 1,000 acres next year. When at full capacity, the plant expects to use sugarcane from about 40,000 acres and sweet sorghum from 30,000 acres. According to the contract with the state tax department, the company expects to add two employees in 2014, 51 next year and 222 by 2018.