Big property-tax breaks for developers that construct clean coal-fired power plants and transmission lines carrying “clean and green” energy were approved by Montana lawmakers on the final day of the special session.
“This is a classic jobs and environment bill,” said Evan Barrett, chief business officer in the governor’s office of economic development.
The builder of a proposed transmission line connecting Great Falls to Lethbridge, Alberta, will benefit from the bill, but it’s too soon to say whether the developers of a coal-fired power plant proposed east of Great Falls stand to gain.
Lawmakers from northcentral Montana predicted the Jobs and Energy Development Incentives Act would spur construction of new clean coal-fired plants equipped to capture climate-change-inducing greenhouse gases, as well as new transmission systems to carry electricity generated from wind farms.
Badly needed economic development in rural Montana would follow, they said.
“I believe this is one of the most important bills this legislative session,” said Sen. Jerry Black, a Republican representing portions of Pondera, Glacier, Toole, Chouteau and Liberty counties.
Under the act, permanent tax rates for new transmission lines needed to get clean power to market would drop 75 percent, from 12 percent of taxable value to 3 percent. Likewise, taxes on pipelines that carry carbon emissions captured at those facilities to storage sites would drop by the same amount.
Taxes on the new clean coal-fired plants would be 3 percent under the act, instead of the current 6 percent.
The coal-fired Highwood Generating Station, proposed east of Great Falls, would not qualify for tax breaks, Barrett said. Only plants that “gasify” coal and capture carbon emissions would be eligible. If Highwood is built, the coal will be burned, instead of gasified.
However, Highwood’s tax rate would be 3 percent anyway because cooperatives already are taxed.
However, plant developer Southern Montana Electric Generation and Transmission still could benefit if it adds carbon-capture technology to the plant, which it is exploring. A pipeline carrying captured gases to storage sites could potentially qualify for the tax break, Barrett said.
The legislation also includes temporary tax breaks –1.5 percent for 15 years – for both new clean-technology plants and transmission lines carrying clean power.
Some landowners who live along the MATL route have complained about the impact it would have on farming operations. In response, Jones inserted language that exempts property on 650 feet of either side of the centerline from taxes. The tax reductions along the entire 130-mile portion of line in Montana would be $40,000, said Rep. Llew Jones, R-Conrad.
Schweitzer introduced the initial “clean and green” energy legislation at the start of the regular session and lawmakers, counties and developers left their mark on it as it progressed.
Jones, who carried the bill in the House, said the new tax rates would make Montana more competitive with Wyoming and the Dakotas in developing both wind and coal resources.
For example, current Montana property taxes on a 500-megawatt, clean-technology power plant with a pipeline and transmission line would be $36 million. With the new rates in place, taxes would be $16 million on that same facility, Jones said.
By comparison, Wyoming taxes on such a power plant would be $10 million, Jones said.
“We potentially could become the battery of power for the surrounding area, including the West Coast,” Jones said.
Montana Alberta Tie Ltd.’s Bob Williams called the passage of the legislation “a very positive development to our project.” During the session, concern arose that the line might not go forward without the tax break.
The $120 million MATL line would connect separate electrical grids in Alberta and Montana. MATL officials say the line could spur up to $1 billion in transmission and wind-farm construction in northcentral Montana.
“We’re relieved we don’t have to speculate on what might have happened,” said Williams, who acknowledged the bipartisan support of the bill.
The bill passed the Senate, 33-17, on Monday night, and the House, 67-27, on Tuesday morning.
By Karl Puckett
Tribune Staff Writer
16 May 2007
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