State tax law benefits wind farms
Owners of wind farms stand to gain from a little-noticed bill passed last month that exempts wind-turbine equipment from local property taxes.
The big winner was FPL Energy, which owns five wind farms in Pennsylvania, including one in Wayne County that was the subject of tax litigation.
“This legislation simply clarifies existing legislation and brings certainty,” Steve Stengel, a spokesman for FPL Energy said, denying that Senate Bill 514 was a tax break. “It was an issue of concern to anyone doing business in the state of Pennsylvania.”
State tax law exempts some business equipment from property taxes but allows power-plant buildings and the land they sit on to be taxed. Nearly all the value of wind turbines, which have no surrounding structure, is in the equipment.
Some counties, notably Wayne County in northeastern Pennsylvania, had argued that the law never envisioned a power plant that was all equipment and no structure, and that wind turbines should be taxed like traditional power plants.
However, the FPL litigation in Wayne County has been settled on terms similar to the new law, Wayne County chief assessor John Nolan said yesterday. He said the new law bans some of the assessment practices the county sought to implement.
Wind industry supporters frequently tout the tax-revenue benefits of wind farms. But the tax revenues that would be collected using the method in the new law are relatively modest.
Wind turbines typically cost $1.5 million to $3 million to build. FPL Energy’s Meyersdale wind farm in Somerset County is assessed using the methods favored by the industry and pays about $1,286 in annual property taxes on each wind turbine.
In Wayne County, where FPL owns the Waymart wind farm, the company settled its 2004 and 2005 tax bills at about $4,400 per wind turbine.
Taxation of wind turbines varies widely among states.
In South Dakota, the tax bill was once $21,478 per turbine. That has since been reduced to about $9,375 for a typical 1.5-megawatt turbine.
Minnesota collects an annual tax of about $293 per turbine.
John Hanger, a strong supporter of wind energy, hailed passage of the Pennsylvania law as a step toward protecting wind energy from discriminatory and unreasonable taxation.
“It seems that wind is being singled out,” said Hanger of the Penn Future environmental policy group.
Hanger and Tom Tuffy, also of Penn Future, said FPL hired former state Rep. Frank “Chick” Tulli of Hershey to steer the language through the Legislature. Tulli could not be reached for comment yesterday.
In addition to Tulli, Penn Future and state Department of Environmental Protection Secretary Kathleen McGinty played important roles in getting the legislation passed, said Frank Maisano, a spokesman for the wind energy industry in the mid-Atlantic region.
By David DeKok
Of The Patriot-News
255-8173 or ddekok@patriot-news.com
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