Morenci, MI – The City of Morenci will be one of the areas impacted by future production of renewable natural gas in the State of Michigan, thanks to actions taken by the Michigan Strategic Fund.
State Senator Joseph Bellino (R-Monroe) said, “This is about helping improve our energy infrastructure here in southeast Michigan and throughout our state. This tax-exempt process will help Chevron make $100 million in investments at five Michigan facilities to produce natural gas, including a location in Lenawee County. The long-term investments will enhance access and reliability of affordable natural gas for Michigan families. It will also help improve our water and air quality by stopping the release of methane gas and putting it to productive use as energy.”
A news release by Bellino’s office said that the Michigan Strategic Fund on Tuesday approved a private activity bond for up to $100 million for the Chevron Corporation for the purpose of financing solid waste disposal facilities related to the production of renewable natural gas at locations in Coopersville, Greenville, Hartford, Morenci and Orleans.
The project will produce renewable natural gas (RNG) for transportation fuel sourced from biomethane from dairy farms. The project will use anaerobic digesters at the farms to capture raw biogas and then clean, upgrade and compress it. RNG from the project will be used to power trucks, buses and other vehicles operating on compressed natural gas.
Public facilities that generate revenue streams, like parking structures, have traditionally been financed by municipalities through tax-exempt “revenue bonds.” Private activity bonds apply the same tax-exempt finance mechanism to the “public purpose” of economic development.
The governmental unit borrows money from private capital markets, secured only by the project’s revenues rather than the government’s full faith and credit. Interest income earned on bonds to finance a project for a private company that has demonstrated a good public purpose is exempt from federal, state and local income taxes, thereby reducing the cost of capital.
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