Tuesday, October 15, 2013

MidAmerican Wind Property Tax October Update

The last 2 posts dealt with my efforts to determine if MidAmerican is paying the correct amount of property tax at their Pocahontas county location. I’m concerned that the wind project is undervalued, and don’t think they are. Several posts on this blog cover my effort to check on only one of their Iowa locations. What if their other projects in the state are similarly undervalued?

According to the newsletter I receive from MEC (a parcel of my farm has an MEC turbine on it), The utility has 13 other project sites in Iowa with 5 more in the planning stages.

 I came up with a large number in Pocahontas County for a potential property tax shortfall ($92 million). Let’s use a more conservative estimate of $50 million, Check my Sept. 10th post for the calculations.

$50 million x 13 existing projects and 5 “yet to be built” projects comes to $900,000,000 in assessed value potentially missing from the tax rolls annually. If so, that would take the luster off the utilities announcement last summer that they would build an additional $1.9 billion in wind projects. 

In addition, very little gross revenue from Utility owned wind projects stays in Iowa’s rural economy (experts generally estimate as little as 1%) . Most wind projects in Iowa are not owned locally. This link from the Iowa Wind Energy Association estimates “Iowa landowners with wind turbines on their land receive more than $16 million dollars annually in lease payments.” Sounds good, but if we figure that $16,000,000 is only 1% of gross revenue, then $1.6 billion is exported out of rural Iowa yearly to companies like MEC.  

Am I the only one that thinks Iowa could be doing a better job with our wind opportunity? So, not only are we not retaining much value from wind in our rural economy, but Iowans don’t seem to have a transparent process to determine if their schools and counties are receiving the correct property taxes from wind. 

Stay tuned!

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