February 14, 2007
Idaho
Idaho
Wind turbines, those domineering and swooping machines of clean energy growing in both numbers and popularity, are being noticed by lawmakers.
Rep. George Eskridge, R-Dover, introduced legislation Tuesday that would relieve commercial wind farms of paying property taxes and instead require a form of excise tax – a “production tax,” he said – through 3 percent of their annual gross revenue.
Eskridge and energy lobbyists said the owners of the turbines rarely have enough capital to pay property taxes immediately. The law would give them additional time by taxing their energy output, as well as give investors a chance to make steadier payments and provide counties up to 10 percent more money for 20 years.
A similar measure passed in the House last year but stalled in the Senate.
“You are talking a lot of time to get into production,” Eskridge said after his presentation to the Revenue and Taxation Committee.
The idea is that property taxes are determined from market value, which will force the property value to decrease over time. The production tax, meanwhile, would always reflect the turbines’ current value.
Eskridge said by the time companies provide actual energy to customers they have already been heavily taxed – without any income. He said turbine production costs will rise 60 percent this year.
“(The bill) is very important because the price of turbines has gone up,” he said.
Some owners of wind-turbines Tuesday were receptive to the idea, including Jared Grover, a developer in Hagerman who plans to build two separate wind farms and is currently working out a deal with Idaho Power Company.
Grover echoed sentiments expressed during the committee meeting and said the toughest part of starting wind farms is having the capital to hook up into power systems. Initially, Idaho Power asked him to find the $60 million to be incorporated.
Grover said the new tax system might end up costing the initial builder money in the long run, but overall would provide investors with a steady stream of investment and communities with consistent income.
“I can’t see any downside for anyone,” Grover said. “The current system is actually overcharging us â€- it’s just you’re essentially paying for your fuel by getting (the turbine) up there and buying all the fuel before you start anything.”
Twin Falls County Comm-issioner Tom Mikesell, referencing a now-defunct Bell Rapids wind farm, said he would support the legislation if it did in fact bring in more money.
“If that’s the direction they’re going and that canactually happen then I’ll support that,” he said.
Mikesell said the bill – which would be retroactive to Jan. 1 2007 – would be a good safety net should the Legislature this session repeal personal property taxes for businesses.
The legislation is being pushed on behalf of Ridgeline Energy, a wind farm energy company with expansion aspirations. It recently introduced a bill to allow the Idaho State Board of Land Commissioners to determine on a case-by-case basis when state land should be leased commercially.
By Jared S. Hopkins
Times-News writer
Statehouse correspondent Jared S. Hopkins can be reached at 343-0901 or jhopkins@magicvalley.com.
14 February 2007
URL to article: https://www.wind-watch.org/news/2007/02/14/dover-lawmaker-pushes-production-tax-for-wind-farms/