Solar Energy at the Former Groveland Mine Site: A Conversation with Lois Ellis & Elise Matz

In this episode of the Rural Insights Podcast, host David Haynes is joined by Lois Ellis, Executive Director of the Dickinson Area Economic Development Alliance, and Elise Matz, Vice President of Circle Power Renewables, to discuss the transformative solar energy project at the former Groveland Mine site in Dickinson County.

Discover how this $200 million investment is repurposing abandoned industrial land to generate clean energy, provide local jobs, and contribute to Michigan's decarbonization efforts. Learn about the collaboration with local townships, the innovative property tax guarantee, and the future of solar energy in the Upper Peninsula.

Transcript

David Haynes:

Greetings everybody, and welcome to another edition of Rural Insights Podcast, and we're glad you're with us and today we are really excited to have with us a good friend of ours for a long time, Lois Ellis, who is the executive director–I'll make sure I get this right–of the Dickinson Area Economic Development Alliance. And Elise Matz, who is vice president with the Circle Power Renewables, which is a project we're going to talk about in Dickinson County. So let's get started with a project overview. Elise, how did Circle Power Renewables get involved in the development of a solar project at the former Groveland Mine site, which is really an interesting, interesting program. 

Elise Matz:

Well, thank you so much for having me here today, David, really appreciate the opportunity to come in and talk a little bit more about this project and a really great time for it too, because we have been working on it now for just about two years and I think we had a really significant milestone just on Monday, Lois was there, we had a community dinner in Felch Township to celebrate giving the Dickinson Area Community Foundation $150,000 in grants and scholarships, which was really exciting and [...] with the help of our local government partners. So the Groveland site, to your question, is pretty extraordinary and we're really excited about it. It was a mine, it was an open pit iron ore mine. They mined iron ore there and then they turned it into pellets for about 30 years, from the early 1950s until 1981. It employed thousands of folks. It produced millions of tons of iron ore and a high quality pellet that was used in modern glass furnaces. So it went to manufacturing cars and appliances and played a big role in the economy. And then in 1981 it was shuttered and it has not been an operation since. So the Hanna Mining Company, which had owned and operated it, handed over that land to the Michigan DNR, and they had some really desirable mine ponds. The Groveland mine ponds are a wonderful recreation area that are enjoyed today. It's four ponds and there's trails throughout. People go there to hunt and fish. It's an easy drive from Iron Mountain, people love it. But Hanna Mining also gifted these tailing basins that are the byproduct of the pelletizing process, it’s just millions of tons of this sand that was the byproduct and the water had settled out of it.

And the DNR did what the DNR does, which is they tried to rehabilitate it. They tried to plant trees and things, but without a terrible amount of success. And so in 2020 when the DNR was sort of considering how they could help decarbonize Michigan's economy, they took an inventory of their land to see what might be suitable for solar energy development. And they came up with the Groveland Mine Tailings Basin and they made that available through an RFP and my boss, Jordan Roberts, submitted an application and won. And so we have been working on developing Groveland mine solar ever since. The project did expand to include private lands as well in the vicinity. So today it includes the tailings basin and it also includes waste rock piles that, some of which are like 150 feet high as well as the area around the abandoned plant where they made the pellets. 

David Haynes:

So for folks that aren't seeing one of these, this is a whole area full of solar panels. 

Elise Matz:

It will be, yeah, that is correct. So it's going to be a pretty large project. It encompasses a few hundred acres and it will be about a hundred megawatts AC once it's connected to the grid, and so that's enough to power 17,600 homes. 

David Haynes:

Wow, that's a big project. Well, I understand that you're working with three local townships on this. How has that gone? I mean, we have, I think in the UP really great local governments and folks that try to work closely with business and interest groups and give their time both professional administrators and elected folks. How has that gone having three to coordinate with? 

Elise Matz:

Yeah, it went really well. We wrapped up the permitting process at the end of October, took about two years, and so my colleague Chris Moore and I were on the ground just about every month going to township board meetings, meeting not only with local elected officials but with other stakeholders in the area. We talked to sportsmen, I talked to Lois's Rotary Club, the Chamber of Commerce, really just about anyone who would give us the time and listen and ask questions. But no, each of them was self zoned. And so in Michigan's current permitting environment, that meant we had to go to each of them and ask for a land use permit. And we were honestly just blown away by how receptive they were to learning more about the project. It's a big deal. It's going to ultimately be a $200 million investment. It is large. And so when we come to the area, we know folks are going to have questions, but they were giving of their time and willing to learn, more people came out and toured the site. And this process culminated in us submitting an application to each of the township planning commissions that was hundreds of pages long and we were just really impressed by how they looked through the information and as thoughtful questions and gave us a fair hearing. 

David Haynes:

I understand that you've offered the townships a property tax guarantee and this is a timely conversation, in the central UP we've just had a pretty large blow up about mining company and taxes, and as these things always do, they seem to get bigger as it gets discussed, and I think that's one of the blessings and the harms of social media, but I was fascinated by that. Can you tell us what a property tax guarantee is and how it works? 

Elise Matz:

Yeah, so one of the big things that utility scale developments like Groveland Mine Solar come with is industrial personal property taxes that are paid to local units of government and that funds things like fire and rescue, the general funds, if school districts have an extra voted millage, like a sinking fund or something like that, that would stay with the district. And so we know that that's one of the big things that we as a utility scale developer bring to the table. And so pretty early on in the process, we actually did an estimate based on what it would cost to build Groveland Mine Solar at the time of what we thought that property tax revenue would be. And we shared that with our local government partners, but pretty quickly people were pushing back on us because there have been so many high profile cases of corporations going to the Dark Store Tax Tribunal, and specifically in the case of renewable energy, the state's guidance on how these projects should be valued has changed.

And that has led to some very notable high profile cases of developers downstate, even clawing back taxes for some wind projects. And that really impacted local schools and governments. And so it was important to us that when we went out and we said, we think Groveland Mine Solar is going to generate $12.4 million in local taxes, that people knew that we meant $12.4 million in local taxes. And so my boss, Jordan Roberts, came up with a legal instrument after talking to several lawyers that would protect the townships and the local taxing entities. Ultimately, it was pretty simple. It's a contract with each of the townships and it lays out how much the project is going to owe each of the taxing entities on an annual basis. There's just a schedule over 30 years, and if for some reason the project owed less, these contracts would make it responsible for paying the difference. And so the local governments know that they have a guaranteed minimum revenue coming in every year, and that enables them to invest in equipment, services are safer for rainy day just with the comfort and knowledge that that funding is going to show up if the project is constructed. 

David Haynes:

Well, that's great. I mean, that's a very creative new way of handling tax liability and government and corporate partnerships and funding. That's really the, I'm sure that townships are thrilled about having a contract that covers that. So what's the timeline here? Where does the project stand today and what's next and when does it start providing power? 

Elise Matz:

We did wrap up that permitting phase, and that took a good two years. We do have testing, some engineering to still do, but of course the long pole in the tent for a solar project or really any kind of electricity generation project is the interconnection process that we need to undergo to get onto the grid. We've been in the miso process and the queue, it's the Mid-Continent Independent System Operator that again, any generation project would have to go through to get online. We've been in that since 2020 and since we've started, there have been delays and they're bringing projects online. So we're keeping a very close eye on that. We should know more about the timeline this year, and as we do, we'll be sharing that with our partners. 

David Haynes:

So that process is a State of Michigan process or a federal process?

Elise Matz:

So I think, gosh, now I'm going to say dangerous or in a dangerous territory. I'm going to say stupid things, but so essentially the federal government created grid operators to make sure that there was enough electricity on the grid at any given time and that it could all connect safely, right? The grid is a shared resource, and so any generation coming online has to go through a series of studies to determine that the transmission system has the capacity to safely transmit the energy that we're putting onto the grid. And we can, certainly, we know that we'll be able to do that. One of the amazing things about this project is that it was located next to a fantastic substation resource that is going to make the project much more economically viable, but certainly MISO has to undergo its process and again, make sure that we're doing the necessary upgrades to ensure that we can connect safely. 

David Haynes:

Okay. Well, let me go to Lois Ellis, who doesn't need an introduction in Dickinson County or the central UP or probably anywhere in the UP. Lois, tell us from the business community and the government community, what's the importance of the project and the economics of it?

Lois Ellis:

Sure. Well, you heard Elise, it's probably about a $200 million investment that will ultimately be made in the northern part of our county, a pretty rural area, and in an area that has been mostly abandoned for decades. And so to see that become viable again in generating some additional activity around the community is just really exciting for our area and certainly for the people that will work on the project. I know the company has been very intentional in working with a number of the labor unions and will have those contractors on site. That means that some of those folks will be working closer to home than they normally have an opportunity to. So we're looking forward to that. 

David Haynes:

How many employees do we think in the end, how many people get employed in this process? 

Elise Matz:

So that would be about two full-time equivalent jobs. So what projects in the beginning to get the project constructed, we're going to need all the help we can get once solar projects are online. They are pretty low maintenance kind of things. We'll have to do ongoing maintenance throughout to make sure that there's no brush to make sure that the wires and connectors are up to snuff. But really solar panels just sit there and absorb electricity–absorb the sunlight and create electricity. That's the beauty of them. 

David Haynes:

Okay, thank you. And Lois, you both talked about this was a long vacant site that's hard to develop for anybody, and the DNR evidently tried to, so this is really a really creative use. So this is taking privately owned land in partnership with the DNR owned acreage and putting together a viable economic and environmental project from the community's perspective. 

Lois Ellis:

Yeah, I mean there are very limited types of projects that could be located on a site like that. And the fact that there was a lot of level ground that was available without any growth on it particularly just really was a good match for solar. And so I think if this project hadn't come along, it would probably sit for decades again without productive activity. And so really kind of a generational opportunity for these townships and our county to see a productive level of activity and the tax generation happening on that site 

David Haynes:

And for local residents. And of course the whole state, the environmental impact of using solar can't be ignored, right? I mean, that's a really huge thing here. I have years ago, went to a huge solar farm project called the Waike Project and one of the largest in the country, and it's amazing to see, and this one will be, it's just a huge, you look at it and you go, wow, you could actually almost feel the differences these panels.

Lois Ellis:

That's an interesting point, David, if I could mention. The fact is that no one will probably, or very few people will actually see this project because of where it's located, which I think is a benefit too, because some people don't want to see that type of infrastructure. And so this site affords some really great layouts that keep it out of view of most residents or other activity in the area. So it's kind of interesting that most folks probably won't even know it's there. 

David Haynes:

Yeah, that's a very interesting point because I was talking to another rural area in Iowa where they're developers putting a huge solar farm in the middle of a bunch of farms. Everybody in the farms in the school right around, they're all sort of looking at it. And it's very controversial because of that. And in this case, this is off somewhere that you won't see it. That's really great. 

Elise Matz:

It's one of the advantages of building, I think, at a former industrial site is that much, not all of it–certainly tailing spaces were open. Not that people were really back there too much, but I think two-thirds of it is going to be located on land that's been gated to public access for decades. And when you put it on top of those waste rock piles, if you set them back a little, you won't even see it from the ground. 

David Haynes:

I have one last question. I have one of my houses, I have solar on it, so I'm always reading about this and I had to replace some panels and I was amazed at the price of the original panels to the price today of panels and this little teeny little project. It was a huge difference. Is that true in one of these big developments, the cost of solar panels has gone down, making them more viable? Is that accurate or is that sort of an exaggeration? 

Elise Matz:

No, I would say that the broad trend is exactly that. They've gotten more cost effective, they've gotten more effective period. And so we can produce more energy with fewer panels in environments like the Upper Peninsula. I think it used to be that you had to have a lot of sun in order to make a project like this viable. And it's a question that we field all the time. Why would you put this in the UP? It's snowing, it's cloudy. But the answer is that we actually have a really good idea of how much sunlight it's going to get. And in fact, there's satellite data in 20-minute increments going back for 30 years, and a solar developer like us actually has to purchase that dataset and take it to a bank and say, look, we get enough sunlight based on the solar panels that we know we're going to purchase and we can make enough electricity. But that really has been made possible by the developments in solar panel technology over the past 10 years. 

Lois Ellis:

David, I just wanted to add one more thing because you mentioned farmland. So the land that this will be on is not being used for farming, it's not being used for logging. There will be no trees cut down, so it's not displacing another use. It is truly industrial vacant property that didn't really have a future until this project came along. 

David Haynes:

Interesting. This is one of the rare projects, after been involved in so many of these over the years, that it's sort of a win-win for everybody, environmentalists, business people, homeowners. No, I'm sure there's not anything where there's never a downside, but it is really an amazing sort of coincidences and brilliance of business to bring it together in technology. That's a great, well, I want to thank Lois Ellis, who's always helping us find out more about Dickinson County. She is wonderful. And Vice President Elise Matz at Circle Power Renewables.

Elise Matz:

Thank you for having us.

David Haynes:

Yeah, great. Thank you. Have a wonderful day, and thanks for doing this, and to all of our subscribers and viewers and readers, we'll get this up real soon so you can listen to it. And of course, we also print a transcript. So for those of you that don't like podcasts, you can read it, or those of you that hate my voice, you can read it. So have a great day and thank you both again very much. 

Elise Matz:

Thank you. Have a great day.