The state Senate argued politely this evening over tax rebates for wind energy projects and environmental upgrades at existing electricity production facilities that generate more than 300 megawatts. The plan won approval with no votes to spare.
Sen. Mike Vehle, R-Mitchell, cast the deciding “aye” in favor after a pause to consider the tally. He was the eighteenth vote necessary for passage. The measure now goes to the House of Representatives for consideration.
The legislation, House Bill 1228, would apply to wind projects where investments exceeded $50 million and would apply to the Big Stone power plant, according to Sen. Tom Hansen, R-Huron.
“I think it’s very important for the state of South Dakota,” Hansen said.
Sen. Bob Gray, R-Pierre, amended the legislation to change the word rebate to refund. It also limits the tax refund for wind projects at $45,000 per megawatt, based on the number listed on the wind turbines’ nameplates.
For example, a 100-megawatt wind farm would see a $4.5 million refund.
The environmental equipment rebate for existing plants would be 50 percent of the sales and use taxes and the contractor excise taxes paid on the project. The legislation is written so that only the Big Stone plant currently would qualify.
“We need to offer some certainty in the marketplace,” Gray said. “I think this is common sense.”
Sen. Elizabeth Kraus, R-Rapid City, spoke against the refunds, which she described as “a special deal” for rate-payers of some utilities while others are left out. Kraus said the refunds aren’t in compliance “with my conservative Republican values.”
The legislation was crafted to be specifically narrow, according to Sen. Corey Brown, R-Gettysburg. He said there needs to be a wider approach that would benefit more types of development.
Gray said South Dakota doesn’t see many massive projects other than wind and power generation.
The Senate debate marked the first consideration of the plan by either legislative chamber with just three working days left in the main run of the 2012 session.
Senate Democratic leader Jason Frerichs of Wilmot said he wished the proposal had been brought forward earlier so there could be a fuller discussion of policy.
A wind-development study conducted last year showed that up-front costs are the biggest barrier in South Dakota, according to Frerichs. He said environmental upgrades forced on the Big Stone plant would be “more palatable” with the refund.
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