Wind farm tax proposal hot air, industry experts say

Wind farm tax proposal hot air, industry experts say

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SPRINGFIELD — Supporters of energy-producing wind farms say a plan to change how the state taxes the giant turbines could put the fledgling industry out of business.

In legislation filed in Springfield, two state lawmakers want to establish a uniform method of assessing the value of wind farms in Illinois.

The proposal is aimed at large wind farms that might straddle county borders, creating problems for the wind farm operators when they deal with different taxing entities.

"Wind farms are relatively new to Illinois and there is no statewide standard for assessment purposes. We are seeing varying approaches to assessing around Illinois," said state Sen. Dan Rutherford, R-Chenoa, who is sponsoring a proposal in the Senate.

Advocates for bringing more wind power to Illinois say the legislation is a bad idea.

"It would essentially shut down wind power in Illinois," said Barry Matchett, policy director for the Chicago-based Environmental Law and Policy Center.

Wind power has become a hot issue in Illinois in the wake of Gov. Rod Blagojevich's 2005 effort to require electric companies to begin generating 2 percent of their output from renewable energy this year. That percentage would rise in future years.

Wind farms already exist in Lee and Bureau counties and more have been proposed in McLean, Livingston, Knox counties. One planned for east of Bloomington would spread an estimated 260 of the giant wind turbines over 21,000 acres.

State Rep. Frank Mautino, D-Spring Valley, is sponsoring a House version of the proposal.

"What I want is to have one way of doing this," Mautino said Thursday. "With a couple thousand of these things coming into the state, we've got to find some way of doing this."

Both pieces of legislation call for the state to base the taxable value on the amount of power that each turbine generates at 35-cents per megawatt.

But Bruce Giffin, general manager of the Winchester-based Illinois Rural Electric Cooperative, said that would be akin to taxing a farmer's combine based on the amount of corn it harvests in a season.

"Why, when oil today is hovering around $70 a barrel, would anyone want to do anything that would hamper development of an alternative energy source?" Giffin asked.

The co-op recently built a single wind turbine in Pittsfield that supplies two megawatts of power to its customers. Officials want to build more, he said.

"If this should become law, we wouldn't build another one," Giffin said.

Grundy County tax assessor Dave Henderson, who helped craft the legislation, said each county may have a different way of assessing the wind farms, creating havoc for the companies as they try to determine their annual costs.

"It would give some of the property owners some certainty on what their property taxes would be," said Henderson. "We're trying to be as uniform as we can be. We're trying to value them so everyone is treated the same."

Giffin said the wind farms would be treated the same if counties just followed current state law.

Matchett said the per-megawatt price should be much lower.

"You're not talking about an industry that has excessive profit margins," he said.

Mautino agreed with industry officials, who said the rate in the legislation may be too high. "They may be correct on that," he said.

Rutherford said he believes 35-cents per megawatt hour is on the low end of what he thinks is an industry standard

"If they say it's too high, tell me what's right," Rutherford said.

Mautino said his legislation is just a starting point for negotiations.

A spokeswoman for Gov. Rod Blagojevich said the proposal is under review.

The legislation is Senate Bill 2418 and House Bill 4668.

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