Moments after City Council members approved his lease Monday evening, entrepreneur Tom Loehr said he hopes to return in about three months with plans to build a methane-fueled power plant at the city landfill.

The terms of the lease are pretty much the same as proposed two weeks earlier, City Manager David Molgaard told members of the council's Finance Committee earlier Monday. The lease is between the city and Loehr's company, Charleston Clean Energy LLC.

If he decides to build the plant, Loehr will pay the city a 12.5 percent monthly royalty on gas used, based on the Appalachian TCO Index Price or similar index. He will pay a minimum of $4,000 per year while the lease is in effect - at least three years, up to a maximum of 50 years.

Loehr has said he hopes to strike a deal with the University of Charleston to sell all the electricity from the plant, and UC President Ed Welch has said he's interested in the project as a way to create a green campus.

Although the lease does not say so explicitly, Loehr also would get all rights to sell any carbon-offset credits and other credits the project might generate. At similar projects in other states, such credits are worth far more than the electricity produced from the methane plant.

Although the measure was approved unanimously, several council members had questions. Cheryle Hall asked whether Loehr will give the city, and the public, copies of the $500,000 feasibility study he plans to see if the landfill produces enough methane to make the project economically viable.

The lease requires Loehr to share that information, City Attorney Paul Ellis said.

 "It goes beyond that," Loehr said. "We have to come back to you to get approval for the site plan of our plant."

Hall asked if the 12.5 percent royalty rate was typical. "All contracts are different," Molgaard replied. "None of them were tied to an index. It appeared to me this is a good deal for us."

Hall also wondered about carbon-offset credits. "Will we ever know how much Mr. Loehr is going to make on carbon credits? Will it be made public?"

Molgaard said the lease does not address that, but he and Mayor Danny Jones said Loehr eventually would pay city taxes.

"We don't generally make taxpayer information public," Molgaard said.

Moments after City Council members approved his lease Monday evening, entrepreneur Tom Loehr said he hopes to return in about three months with plans to build a methane-fueled power plant at the city landfill.

The terms of the lease are pretty much the same as proposed two weeks earlier, City Manager David Molgaard told members of the council's Finance Committee earlier Monday. The lease is between the city and Loehr's company, Charleston Clean Energy LLC.

If he decides to build the plant, Loehr will pay the city a 12.5 percent monthly royalty on gas used, based on the Appalachian TCO Index Price or similar index. He will pay a minimum of $4,000 per year while the lease is in effect - at least three years, up to a maximum of 50 years.

Loehr has said he hopes to strike a deal with the University of Charleston to sell all the electricity from the plant, and UC President Ed Welch has said he's interested in the project as a way to create a green campus.

Although the lease does not say so explicitly, Loehr also would get all rights to sell any carbon-offset credits and other credits the project might generate. At similar projects in other states, such credits are worth far more than the electricity produced from the methane plant.

Although the measure was approved unanimously, several council members had questions. Cheryle Hall asked whether Loehr will give the city, and the public, copies of the $500,000 feasibility study he plans to see if the landfill produces enough methane to make the project economically viable.

The lease requires Loehr to share that information, City Attorney Paul Ellis said.

 "It goes beyond that," Loehr said. "We have to come back to you to get approval for the site plan of our plant."

Hall asked if the 12.5 percent royalty rate was typical. "All contracts are different," Molgaard replied. "None of them were tied to an index. It appeared to me this is a good deal for us."

Hall also wondered about carbon-offset credits. "Will we ever know how much Mr. Loehr is going to make on carbon credits? Will it be made public?"

Molgaard said the lease does not address that, but he and Mayor Danny Jones said Loehr eventually would pay city taxes.

"We don't generally make taxpayer information public," Molgaard said.

Councilman Cubert Smith said he was worried about the safety of the landfill once Loehr starts drilling test wells for the feasibility study. "If they happen to puncture the rubber liner and leachate starts leaking, will Mr. Loehr be responsible for repairs?"

Molgaard said Waste Management, which operates the landfill under contract with the city, is responsible. "Tom will have to enter a separate agreement with Waste Management."

Councilman Jack Harrison said the lease further protects the city by requiring a $1 million insurance policy. "We have no risk here," he said.

One section was added late last week to the draft lease that council members received earlier, Molgaard said - a succession clause that says Loehr cannot sell, sublet or transfer the lease, and must remain as the senior manager of his company, unless the city allows otherwise.

The clause was added at the request of several council members, Ellis said, including Council President Tom Lane.

Some observers contacted the Gazette recently, recalling that in 1990, Loehr purchased two family-owned cable companies in the Morgantown area after allegedly promising to operate the companies himself. He sold them the same day to Century Cable for a $2.3 million profit, according to published reports.

Lane said he was aware of Loehr's cable deal, but wasn't sure if he had any obligation to maintain ownership.

"I think it's important to the city to know who's on its property," Lane said late last week.

In other business, council members agreed to restore full funding to the Kanawha-Charleston Health Department, reversing a stance taken earlier this year to withhold $100,000 - half of the yearly contribution.

Molgaard said he felt negotiations were progressing for moving the Health Department into the city-owned building on Morris Street beside Appalachian Power Park.

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