In the utility's press release for wind XI, once again, MEC indicates that its wind projects cost more than the valuations the utility has reported to county assessors.
The utility lists the cost of wind XI at $3.6 billion , and will use 1000 turbines, and have 2000 megawatts of capacity. In the past, the utility has reported valuations of their wind projects in the area of $1600 per kilowatt, and even lower in some of the county assessor filings I've seen.
It looks like MEC will use 2 megawatt turbines, as noted by using 1000 turbines to reach the 2000 megawatts. The following release in North American Wind Power mentions MEC has selected Vestas 2 megawatt turbines for wind XI.
From North American Wind Power
Using the MEC provided project information, let's do the math.
$3.6 billion divided by 1000 turbines = a cost of $3.6 million per turbine.
$3.6 million divided by 2000 kilowatts = an installed cost of $1800 per kilowatt. quite a lot higher than the utility is reporting to county assessors.
$200 x 2000 kilowatts per turbine = a possible undervaluation per turbine of $400,000.
1000 turbines x $400,000 = equals a potential $400,000,000 undervaluation of this wind project for for tax purposes.
I'm using Mid-American"s cost figures, from their press release, so once again , we have another example of the utility listing higher valuations for their wind projects than MEC reports to county assessors.
Previous posts on this topic have also noted examples of the utility listing higher valuations at FERC, and the the IUB than at the county levels.
Part of the project cost includes grid interconnection . It's possible the missing $400,000,000 might be interconnection costs. MEC is on record reporting some wind costs in the utility replacement tax instead of classified as wind property. even though the wind property tax code seems to say otherwise.I'm guessing a private wind developer (not an Iowa utility) couldn't do this.
The main questions I have from researching this are-
Why am I consistently finding lower valuations reported at the county level than MEC reports in their press releases, FERC, and the IUB ?
How much revenue is local government losing because MEC reports wind assets in the utility replacement tax program ? Sorry public , its confidential at the department of revenue.
Is the utility self reporting the replacement tax filings with little or no review by the department of revenue? That department has not answered my question about what audit procedures are used to verify MEC's replacement tax filings .
It's time for this information to be made available to the public so we can see. I'm certainly willing to discuss this with the utility , appropriate state agencies, or elected officials.
Considering the growing public resistance to large scale wind projects in Iowa, making the utility's wind costs available to the public would let voters see if the utility's cost savings of buying turbines in bulk is more than offset.by transmission cost upgrades to connect industrial wind to the grid.
Then policy makers could determine if if future renewable energy projects should be smaller , more distributed, and owned by regular Iowan's instead of a Berkshire Hathaway utility.
I'm wondering if wind projects were owned by regular Iowan's, that it would make it easier to sort out this property tax issue!
"We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."