CHARLESTON, W.Va. - A proposed lease that would allow developer Tom Loehr to build a methane-fueled power plant at the city landfill was pulled at the last minute from the City Council agenda Monday.

The lease also was retracted from the agenda of council's Finance Committee because a few terms were still up in the air, City Manager David Molgaard said.

Molgaard promised to distribute the final draft within two or three days in order to give council members plenty of time to read and consider the provisions before council's next meeting Aug. 18.

Committee members still had plenty of questions about the project. Two weeks earlier, Loehr and Mayor Danny Jones first presented the plan where Loehr would raise $3 million through his company, Charleston Clean Energy LLC, to build a system to collect methane from the city landfill and a plant to burn it to produce electricity.

Much of the methane, a potent greenhouse gas, simply escapes into the atmosphere now, although some is gathered by vent pipes and burned to reduce odors, Loehr said.

"The terms of the lease are for three years, and if they haven't done anything by then the property goes back to the city," Molgaard said. "If they have, it could go up to 50 years as long as they are producing and using methane gas."

The 50-year limit is significant, he said, because state law allows cities to enter no-bid leases for up to 50 years, if they follow certain rules.

"A lot of people have questioned, why not put out a request for proposals for this," Molgaard said. In particular, Council President Tom Lane last week questioned whether the city could enter such a lease without first seeking competitive proposals. "This allows us to do it by lease."

The city will receive a 12.5 percent royalty based on the volume of gas, based on an index, Molgaard said. "If he's not producing gas and we're not receiving a royalty, he has to pay $20 per acre."

CHARLESTON, W.Va. - A proposed lease that would allow developer Tom Loehr to build a methane-fueled power plant at the city landfill was pulled at the last minute from the City Council agenda Monday.

The lease also was retracted from the agenda of council's Finance Committee because a few terms were still up in the air, City Manager David Molgaard said.

Molgaard promised to distribute the final draft within two or three days in order to give council members plenty of time to read and consider the provisions before council's next meeting Aug. 18.

Committee members still had plenty of questions about the project. Two weeks earlier, Loehr and Mayor Danny Jones first presented the plan where Loehr would raise $3 million through his company, Charleston Clean Energy LLC, to build a system to collect methane from the city landfill and a plant to burn it to produce electricity.

Much of the methane, a potent greenhouse gas, simply escapes into the atmosphere now, although some is gathered by vent pipes and burned to reduce odors, Loehr said.

"The terms of the lease are for three years, and if they haven't done anything by then the property goes back to the city," Molgaard said. "If they have, it could go up to 50 years as long as they are producing and using methane gas."

The 50-year limit is significant, he said, because state law allows cities to enter no-bid leases for up to 50 years, if they follow certain rules.

"A lot of people have questioned, why not put out a request for proposals for this," Molgaard said. In particular, Council President Tom Lane last week questioned whether the city could enter such a lease without first seeking competitive proposals. "This allows us to do it by lease."

The city will receive a 12.5 percent royalty based on the volume of gas, based on an index, Molgaard said. "If he's not producing gas and we're not receiving a royalty, he has to pay $20 per acre."

Councilman Jack Harrison pointed out the city would receive other benefits - B&O taxes on construction, severance taxes and B&O taxes on the sale of electricity. He asked Loehr about timing of the project. "Are any tax credits going to expire?"

Loehr said Section 45 federal tax credits expire Dec. 31. But he previously said the project could not be completed by then, and he has not considered those credits in his calculations.

Councilman Bill Miller asked Loehr if he could guarantee he can raise the $3 million needed for the project.

"I'll guarantee, if it's feasible, we'll raise $3 million. I'll also guarantee we'll raise enough for a feasibility study, which will cost $500,000. Even if the project is feasible, it's not a slam dunk," Loehr said.

Councilwoman Cheryle Hall said she was concerned about the terms. She said she'd heard other cities get far more than 12.5 percent royalties.

"I just want to make sure the citizens of Charleston are protected to get the best deal," Hall said. "What are other cities and counties getting? Did anybody bother to find out?

"If other cities are getting 20 percent, I want to know so that it isn't in the newspaper in five years that Mr. Loehr is making beaucoup money and the city is getting a tiny amount."

Jones, who has strongly supported the project, said he could guarantee one thing: "If we don't do this, the federal government will do it for you. It's part of the green movement."

In other business Monday, council members:

Reach Jim Balow at ba...@wvgazette.com or 348-5102.