It’s time to
update efforts to determine if MidAmerican (MEC) is paying correct property
taxes on their wind assets in Iowa, I’m going to concentrate on a small segment
of the MEC wind project near me. The project was built in 3 phases. The 3rd
phase consists of thirteen 2.3 megawatt turbines, 5 in Pocahontas County, and 8 in Calhoun County. Curiously, each county valued the turbines differently,
Pocahontas at $3.66 each, Calhoun at $3.60 million. These figures were quoted
to me during visits to each assessor office. Since then, the two county
assessors have apparently networked and each county’s assessment currently
stands at $3,631,990. I’ve asked each assessor to show
me how they calculated the valuations, and how come there was a difference in
the original valuations. Both have recommended
I review the MEC property tax filings I accessed in both counties.
I’ll get to
the filings shortly, but first, state law allows Iowa taxpayers to contest
property tax assessments in an annual April to May period at a county review board.
I filed a petition contesting MEC’s wind values in Calhoun County during
May. I requested an oral presentation,
and was allotted 15 minutes to present information supporting my concern about
MEC’s wind property valuation. I noted the difference between the valuations in
each county, concern that the utilities don’t appear to itemize all project
soft costs in their county filings, and my general concern that the county
valuation was vastly south of the project cost caps negotiated by MEC, Office
of Consumer Advocate (OCA), and the Iowa Utilities Board (IUB), all entities with
much experience with wind costs. I also offered to help, as I have consulting
experience with wind projects. I requested the county access MEC’s Utilities
Board filings and thoroughly review them.
The county dismissed my petition for “lack of standing”.
It’s Interesting
to note (also a little disappointing) that the Calhoun Assessor noted in a
letter dismissing my claim that she had contacted the IUB. She wrote that the
cost caps weren’t relevant to valuations, and that the final project cost was
$1611 per KW. See below.
We can compare the project cost per kilowatt
to the county wind property valuation. A 2.3 megawatt wind turbine = 2300
kilowatts. 2300 x $1611 per KW = $3,705,300, a number higher than either county
valued the turbines, and higher than MEC’s county filing appraised the turbines.
I relayed this to the assessor by email
and received the following response – “As
I have said before, we do not assess per kw.
That is what you are using to compare.
We are assessing the same as Pocahontas County, as well as every other
county with wind energy property.”
This is why
I asked the county to review the IUB filings to determine why the numbers were
different, and determine if all hard and soft costs are accounted for in the
valuations, as the Department of Revenue (DOR) advises County
assessors to do. Also at issue, what
items are used to determine the IUB caps?
OK… back to
the utility filings. A few interesting examples are below. The first 2 are examples of the ledger
invoices costs listed in the MEC Calhoun County filings.
In my opinion,
I think it’s hard to determine if these are actual costs incurred in the county,
or general costs at multiple locations. A more useful format would be itemized
costs of turbine towers, nacelles, foundations, balance of plant, and per
turbine soft costs. I can’t determine if the underground cable between turbines
is accounted for in this filing. The filings for the 3rd phase in
Calhoun County included these invoice records. Pocahontas County has all three project
phases, but MEC only included invoice records for the first phase. It appears
the utility filed no supporting documentation for the other 2 phases. The filings
over the last 5 years have also raised and lowered the value per turbine. See below.
A decrease in cost was filed in 2013. Also note
that MEC lists 11of the 2.3 megawatt turbines installed in Pocahontas County.
A 2014
filing raises the value, again with no supporting documentation. Also note MEC counts 8 of the 2.3
megawatt turbines installed in the county.
The Pocahontas county Assessor counts 5 of the 2.3 megawatt turbines, by the way.
So what to
do about this issue? I found quite a few
items that conflict with each other while examining this small segment. Given that the Utility seems to have misplaced
some of the turbines they thought were in Pocahontas County, and that there seems to be
differences between the utility county filings and information provided by the
IUB, it seems fair to question the costs submitted. Since the Calhoun assessor notes that all counties
are using the same method to calculate wind values, here are my recommendations:
1-This is an Open Records issue! Both
counties originally denied my request to see these records. Once they were
reminded of the section of the Iowa code that allowed citizens to review
property tax filings, they allowed me access. My local review board petition
was dismissed using Utility board information that I have not had access to
yet. Lack of transparency has been a big problem in sorting things out with
this issue. Iowans should have access to these records.
2 – Every county
with MEC wind assets should review
the MEC filings at the IUB, and thoroughly review their own current methods of
wind valuations. MidAmerican originally offered to make their tax department
personnel available to review this issue.They have yet to do so. It seems that 3rd parties
should be involved in this process as well. I'm volunteering.
3. Again, 3rd
party consultants familiar with wind costs should be involved as well. That
might be difficult, as most consultants might have conflicts of interest, having
worked for existing projects. The IUB
and OCA are watching out for the ratepayer, so they may be perceived
as having a conflict as well.
4. The DOR should offer more assistance to
county assessors to determine if all hard and soft project costs are accounted for.
Iowa now has several billion dollars of wind assets installed. Even small
mistakes on valuations can add up to larges values not on the state tax rolls.
So, I’ve
shined a ray of sunshine on this issue. It needs more work. I still haven’t learned why MEC and the IUB
modified the cost caps for this project 5 times , but the county only has 3
property tax assessments for this project. Citizens can appeal to a state
review board if they don’t agree with their (or their neighbors) Property
assessments. I’m hoping local government will address it. I’m still reviewing about 100 pages of MEC’s
county filings, so more interesting stuff will probably surface. Stay tuned…
P.S. It’s probably
obvious to blog visitors that writing skills are not my greatest asset, So
thanks for checking me out and enduring grammar errors, fragmented sentences,
etc. I’m covering some energy issues that I really think need more discussion
in Iowa, not all of them positive, so I’m going to try ending with an
inspirational link when posting.
Recently, Germany
set another renewable record, generating nearly 75% of their electricity
with renewables – without building a bunch of big transmission lines. Almost
half of renewables there are owned by farmers and regular folks, instead of the
corporate business model that makes up the majority of U.S. renewables. Iowa is
nowhere close to that number, though we enjoy better wind and solar resources
than Germany. It’s time for Iowa to
think locally when it comes to renewables!
