If wind farm developers looked only at the bottom line, Illinois likely would be one of the last places they’d try to erect hundreds of wind harnessing turbines.
Property tax rates are among the highest in the region. The permitting process varies from county to county, and roughly half of the petitions put forth so far have resulted in litigation with opposition groups. The strength and steadiness of the breeze is good but better elsewhere.
It’s other factors that attract renewable energy companies to the state – central Illinois in particular – and will keep them interested for years to come.
“Illinois is the next Texas for wind,” said Joel Link, director of business development for Chicago-based Invenergy, referring to the state with the most existing wind energy capacity.
Link and more than 100 other wind farm developers and local government officials attended a conference hosted by the Illinois Wind Working Group on Thursday at the Hotel Pere Marquette to dissect turbine site and taxation issues.
Among the primary topics was legislation passed earlier this year that provides a uniform method for determining a turbine’s assessed valuation. Previously, each county tax assessor could determine separate values for property tax purposes.
The law has been widely interpreted to mean turbines will be taxed, in their first year of operation, at $9,000 per megawatt of capacity. Most turbines being constructed today have a capacity of 1.5 megawatts.
That figure, however, is misleading, according to Jesper Michaelsen with Chicago-based PPM Energy. The rate per megawatt in some cases will rise as high as $13,000 when local tax rates are tacked on to the total.
“In some places, it will be less (than $9,000), but in most cases it will be significantly more,” he said. “For those of us in the wind industry, I think we would not be telling the truth if we said that didn’t have an impact.”
Yet for companies like PPM, Invenergy and at least a dozen others, the opportunities are irresistible. First, there’s the demand. The state has sizable population centers and a government that wants 25 percent of energy needs to be met by renewable resources by 2025.
Then there’s the infrastructure. The existing network of high-capacity transmission lines can feed power generated by wind turbines into the regional grid, making it relatively easily available to utilities that will deliver it to consumers.
And, of course, there’s the wind. Illinois is no North Dakota, where an estimated 138,400 megawatts could be generated, but the Prairie State is capable of 6,980 megawatts, ranking it 16th in potential capacity in the nation.
Combined with the other incentives here, wind energy makes sense for the developers. Invenergy alone is actively pursuing as many as 2,000 turbine sites that could generate as much as 3,000 megawatts. Only 66 of those turbines are under construction in LaSalle County at the Grand Ridge project.
“There’s a tremendous wind resource, a tremendous renewable energy standard. . . . It’s kind of a perfect storm right now,” Link said. “(Illinois) truly is going to be a leading state when it comes to wind energy capacity.”
By Matt Buedel
14 December 2007
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