MidAmerican Wind Property Tax

(Thanks to Gregg Heide for digging into this issue. We all support wind energy projects, but the numbers below suggest that some school districts near a major MidAmerican Energy wind farm "might be due more [tax] revenue than they are receiving now." - promoted by desmoinesdem)

I’ve been trying to discover if MEC is paying the correct amount of property taxes at their wind farm located near me.  The quick answer is- I don’t think they are– due to information (mostly a lack of information) provided by MEC employee Dean Crist.   An earlier post on this subject can be found here. Interested folks are invited to examine more posts on this subject at my blog.

To recap:  I became curious about how Pocahontas County determined the rates for the MidAmerican (MEC) wind project in the county. The assessor’s office provided me with a property tax appraisal for the wind farm (constructed in three phases), for the first 131 turbines – $2,580,000 ($1720 per kW), the next 39 at $2,850,000 ($1,900 per kW) and $3,660,000 ($1591 per kW) for the final 13. The assessor’s office reluctantly provided basic filings (after an attorney requested them in writing) submitted to the county by MEC that roughly match the assessments, listing met tower, land, turbines, and substation costs. Phase 1 & 2 are 1.5 megawatt turbines. Phase 3 turbines are 2.3 megawatts.

The following numbers were provided by Mr. Crist:

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Iowa Court Ruling Favors Distributed Generation

(Important story: more background on the Iowa Environmental Council blog and at the Vote Solar website. - promoted by desmoinesdem)

Today (April 12), Midwest Energy News ran the first coverage I've seen on an Iowa district court ruling in favor of allowing solar installers to install PV systems on a customers property and enter into a power purchase agreement with that customer.While great news, I'll explain why you may not want to get overly excited over this development. I'll apologize in advance for sounding like a grumpy curmudgeon. I'm a fun guy,Really!!

There are reasons I'm sounding glass half empty here. First, this ruling could be appealed (and over turned by a higher court). This happened in 2005 when the Iowa Supreme Court reversed its ruling that required rural electric cooperatives to offer net metering. Let”s hope this recent ruling fares better. Still, as the good folks quoted in the article note, this decision will no doubt influence other court and utility commission rulings around the country. That's good news.

The next reason I'm only moderately excited here is that this ruling only affects one financing method for solar PV, not any of the underlying regulatory changes necessary for its use to become widespread in Iowa. Many Iowans don't have access to net metering or standard interconnection procedures (investor owned utilities only, not RECs and Municipals). They also can't get a fair price for electricity sales. Remember that feed in tariff legislation I've been blogging about? The state Senate Democrats were unable to bring SF372 to the senate floor for a vote. Chalk up another one for the utility lobby. So, if you're dealing with any or all of these issues, you probably don't care much about leasing a PV system. Your potential PV system salesman won't be very interested either.

Also, there are ways to structure a lease agreement without entering into a Power Purchase agreement with your PV salesman. Ideally, leases should also save you money over your current monthly electric bill and eventually enable you the option to own the asset. Leasing does have its place, schools, hospital, and other non-profit entities will be interested for sure.

Finally, my opinion is that third party PPA leasing will be mostly used by customers interconnecting to Alliant energy, a utility with relatively high Iowa retail electric rates, net metering, and standard interconnection procedures. I see this as a continuation of the unequal experience Iowans have when trying build renewable energy systems. Solar installs in Alliant Energy service territory have become fairly easy and will become commonplace. Iowans working with other Iowa utilities could have more difficulties or find out it is almost impossible to build the same system. This unequal treatment for Iowa ratepayers will most likely result in more constituent calls to Iowa legislators to fix these regulatory issues and level the playing field in Iowa. Hopefully Iowa policy advocates will also unite and send a clear message to Iowa legislators about the policy changes Iowa needs to advance locally owned renewable energy. This court ruling should help move our state in the right direction.

 Gregg Heide 

MidAmerican and Iowa wind farm property tax

(The author of the Iowa Renewable Energy Farmer blog raises an important question about a large wind farm in northwest Iowa. - promoted by desmoinesdem)

I’ve been trying to determine if MidAmerican Energy Company (MEC) is paying the correct amount of property tax on their wind farm property in Pocahontas County.  As it turns out, this is not an easy task for an interested Iowa tax payer. The reason for this winter "adventure" stems from the county supervisors proposed creation of a Tax Increment Finance district around MEC’s wind project. If they proceed, tax revenue would be diverted away from our school district, fire department, etc., for other projects in the county. An individual taxpayer within the school district will mostly likely see their tax rates increase as a result.  Since the county is debating where to spend their "windfall" revenue, I became curious about how the county determined the tax rates for an asset with over a $1/2 billion in value. In the interest of full disclosure, I have a company that offers consulting for wind farm development, so I have some experience with this issue. (continues below)


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Iowa lawmakers should advance renewable energy policy

(Good commentary on how Iowa could improve on policies to promote renewable energy production. - promoted by desmoinesdem)

Many Iowa Farmers and residents are becoming interested in distributed electrical generation (DG). DG is a broad category, usually consisting of generation installed on Distribution lines (not transmission lines) close to electrical load. Common technologies are Solar PV, Wind Turbines, Fuel Cells, Biomass, etc. Size of systems start with small solar arrays and wind turbines installed on rooftops or farm yards, and continue up to systems of several megawatts constructed near communities or large electric users.

Iowans stand ready to invest in and build these types of renewable energy facilities. However, development of this type lags behind other states and countries, despite the fact that Iowa has excellent wind, solar, and biomass resources. The reason for this is that Iowa lawmakers have not made the policy changes necessary for them to proceed. DG simply needs a fair price for the electricity produced and simple procedures for interconnecting to the electric grid. Iowa lawmakers have declined to take this issue up for several years, fearing the wrath of the utility lobby. Since 2005, Iowa legislators have only been willing to encourage DG in Iowa with several, mostly ineffective incentive programs. The main programs are a tax credit program passed in 2005 to encourage distributed wind energy and a tax credit for solar PV passed in the 2012 legislative session. DG systems need fair treatment from Iowa Utilities, not subsidized, in order to move forward.

Let’s look a little deeper.  

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