Wind tax changes taken out of energy legislation

Published 10:20 am Friday, May 1, 2015

Mower County leaders got their wish a little sooner than they expected when it comes to wind production revenue.

The county board came out in strong opposition Tuesday to state bills that would have changed how counties receive funds through the energy production tax. But earlier this week, the wind and solar production tax was taken out of the proposal during discussions for the energy omnibus bill, according to bill’s author, Sen. Rod Skoe, DFL-Clearbrook.

“We don’t want to do anything to not be supportive of our renewable energy resources,” Skoe said.



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Under the initially proposed change, Mower would have lost $1.27 million in production tax funds, but the money would be replaced by about $648,000 in transition aid and about $624,000 in new property tax funds, which would be paid by energy companies that own the wind tower sites.

While Skoe said the bill’s authors thought the transition aid would have made for a relatively even tradeoff, it caused County Coordinator Craig Oscarson and Mower commissioners to be concerned about the stability of future funding.

“It goes from a very stable funding source to a funding source that is going to sometimes be subject to the whims of the Legislature,” Oscarson said.

Skoe said he and other tax committee members heard feedback from Sen. Dan Sparks, DFL-Austin, and county officials across the state voicing concern over the change.

“In the end, with the work of some of those folks, we decided to go back to where they currently were,” Skoe said.

Mower has reaped the benefits of its 253 wind turbines through the wind production tax credit, which brought in $9.3 million from 2004-14 — the most of any Minnesota county, according to data from the state’s Department of Revenue and the American Wind Energy Association.

In 2014, just under $1.6 million went to Mower County based on 2013 energy production — $1.27 to Mower County and about $318,000 was distributed among the townships with towers.

The money goes into the county’s general fund, and the county has long described the production tax money as an offset to property taxes.

Chris Kunkle, a regional policy manager for Wind on the Wires, said the nonprofit shared similar concerns voiced by many across the state.

“The wind production tax makes sense,” said. “It allows for development. It’s not burdensome for wind companies, but it also provides some real value for host communities.”

The production tax makes Minnesota competitive to wind companies, according to Kunkle, and he said it makes projects appealing counties and townships.

“It really is critical to the industry that we maintain those strong relationships with host communities,” Kunkle said.



“A stable source like the wind production tax is very appealing,” he said.

Mower County is set to get more than $1.5 million from wind production tax again this year, according to documents from the Association of Minnesota counties.

The county is primed to receive even more funds through the energy production tax. Renewable Energy Systems Americas is currently constructing the 100-turbine Pleasant Valley project, which will add 88 turbines in Mower.

County officials have estimated that could add another $400,000 through the energy production tax by about 2016 or 2017.

EDF Renewable Energy is working toward building a wind farm with about 25-turbines.

If completed, the EDF project, along with Pleasant Valley, could make for about 360 turbines in Mower County.