I found the following article by Loren
Hough, for the Chronicle Times in northwest Iowa. It assembles a lot of good information
about wind project property taxes in NW Iowa. Of interest was the following - “According
to Mike Prior at the Iowa Wind Energy Association (IWEA), the estimated cost of
new wind energy is generally pegged at $1.8 million per MW in 2014. That wind
energy cost estimate figure was at $2 million per MW in 2012.”
My last post on this topic concentrated on one small part of
the MidAmerican (MEC) project in Pocahontas and Calhoun counties, using 2.3
megawatt turbines. In that post, I noted the current assessment of $3,631,990 per
2.3 megawatt turbine, installed in 2012, at MEC’s Pomeroy project. If we use
Mike’s above figures, It appears that IWEA (MEC is a member) thinks
it should cost almost $1 million additional dollars to install a 2.3 megawatt
turbine.
2012 costs - $2 million per MW x 2.3 megawatt = $4,600,000.
The article also notes that O’Brien county estimates the
value of MEC’s 500 megawatt project there (214 turbines, 2.3 megawatts each) at
$900,000,000, installed in 2014.
$900,000,000 divided by 214 = $4,205,607. IWEA’s 2014 cost estimate is $1.8 Million
per megawatt.
$1,800,000 per MW x 2.3 megawatt = $4,140,000.
Much closer to IWEA’s
estimate. What exactly is going on in Pocahontas and Calhoun County? I haven’t been to determine the reason for
this huge difference in assessed value by examining the MEC filings in these 2
counties.
I want to clarify that I’m a huge wind energy supporter (you
won’t find a bigger supporter). I’m just trying to determine if MEC is paying
the correct property taxes on their wind assets. I also tend to prefer locally
owned wind turbines over the absentee owned projects. So, let’s take a look at
that.
The article correctly points out that current wind
development has been a “windfall” for the counties that land a wind project.
The O’Brien county assessor notes that the MEC project will net a $6,480,000 annual
property tax payment when assessments are fully in. So, nothing to sneeze at,
but what would happen if this project were locally owned? The property tax
amount would be the same, but gross revenue for electric sales would also stay
in the county.
The Iowa Energy Center
has a nifty calculator
for estimating wind turbine potential. The calculator did not have a 2.3 MW turbine
choice, so I used a 1.6 MW turbine instead, and selected a town in O’Brien
County . Here is the estimate.
A 1.6 megawatt turbine will produce approximately 6,725,742
kilowatt hours annually. It takes 312 of 1.6 megawatt turbines to = the
projects 500 megawatt size. Iowa Utilities Board 2009 Docket RPU-09-0003
contains an estimate that MEC is paid 7 to 9 cents per kilowatt hour for wind
production.
6,725,742 x .07 cents per kWh = $470,801. That figure x 312
turbines = a much bigger annual revenue number than the
annual property tax number. $146,890,205 annually for the county in gross
turbine revenue!
Does anyone else think it’s time for state policy that
encourages local ownership of wind energy? That policy would spread wind energy
all around the state, letting more counties benefit than the select few that
hit the home run by landing a big project. And Iowa sure isn’t keeping much
wind profits in the local economy. This
post was originally going to be about why Tax and regulatory policy is preventing
farmer owned wind energy, but this seems to be a good Segway into that topic.
Thanks for stopping by.
Here’s a positive story about renewables, as promised. What
happens when you design a successful locally owned energy program? Quite
a bit!
