The Free Press, Mankato, MN

Local News

June 19, 2008

Janesville ethanol plant opening uncertain

Tim Krohn

JANESVILLE — The company building a 110-million-gallon a year ethanol plant in Janesville has not decided if it will begin operating the plant when it is completed later this year.

“We’ll continue to monitor market conditions on a daily basis now,” said Michael Lockrem, communication manager for VeraSun Energy.

With record high corn prices and depressed ethanol markets, the Brookings, S.D., company has decided not to operate two other plants that are almost finished — one in Welcome and one in Hartley, Iowa.

The Janesville plant is to be finished in October.

The uncertainty will cause Waseca County to closely scrutinize a subsidy package the plant is requesting.

VeraSun has filed a request with the county to get up to $1.2 million in future property taxes abated. Under the abatement, the company would not have to pay the full property-tax bill for several years on the value of the new construction. Tax abatements are a common subsidy used by local governments to attract new industries.

Waseca County Coordinator Bruce Boyce said part of the reason the county considers such abatements is because of new job creation.

“One of the requirements the county has in these economic development agreements is job creation. The plant was to have 40 new jobs. So if there is a delay, it might affect how the County Board looks at the abatement,” Boyce said.

“It would be fair to say we’d have some concerns if the opening were delayed.”

Lockrem said corn prices — which have hit $7 to $8 per bushel recently — are part of the problem but so is the the price of ethanol. “Ethanol has been undervalued for some time, but it has rebound some in the past week.

VeraSun has 11 operating ethanol plants and six under construction or in development. The company produces more than 1 billion gallons of ethanol per year.

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