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Contribution not a windfall

A Republican & Herald article of May 18 claimed a “windfall” benefit would accrue to Mahanoy Township because Iberdrola has agreed to donate $18,000 annually – representing payment in lieu of property taxes for its dozen industrial wind turbines (i.e., $1,500 per turbine). Iberdrola’s wind energy facility – the Locust Ridge windplant – has a dozen 2.0-MW wind turbines, which have been operating for a year within Mahanoy. The $18,000 “gift” actually amounts to only $750 per MW since the combined generating capacity of the 12 turbines is 24 MW.

Is this really a “windy benefit” or a “windfall”? Not in comparison to what other local jurisdictions are receiving for wind turbines built in other states. Iberdrola’s paltry contribution is heralded as a “benefit” only because the PA legislature just exempted the wind industry from having to pay local property taxes. This more than $35-million industrial facility owes virtually no local property tax.

National statistics indicate that windplants elsewhere are contributing far more to the local tax base. A May 2006 article in North American Windpower (http://www.windustry.com/news/NAW0506.pdf ) revealed that “Property tax payments vary widely and range from $1,400 and $11,000/MW of nameplate capacity, with a nationwide weighted average estimated to be $6,400/MW.”

Consequently, Iberdrola’s $18,000 contribution offer to Mahanoy Township for its Locust Ridge wind energy facility represents less than 12 percent of the national average payment made by windplant owners to local jurisdictions. Furthermore, Mahanoy is getting about half of the low-end range of payment for a wind energy project ($750 per MW vs. $1,400 per MW), which is roughly seven percent of the top-end payment to local communities from wind energy project owners ($750 per MW vs. $11,000 per MW).

Furthermore, a report by the National Conference of State Legislatures regarding windplant contributions to local governments reveals that the 30 MW Fenner windplant located in upstate New York provides $150,000 annually to the Town of Fenner as payment in lieu of property taxes ($5,000 per MW) (see p. 2: http://www.greenenergyohio.org/page.cfm?pageId=499). This amount is nearly seven times the rate of annual financial contribution that Iberdrola is offering Mahanoy.

Although some will regard Iberdrola as a “gift horse” which shouldn’t be questioned, they are merely tossing Mahanoy Township a small bone to avoid the scrutiny and adverse publicity which this circumstance merits.

Laura Jackson, Chair

Save Our Allegheny Ridges

Everett, Pa.

The Republican & Herald

27 May 2007