March 16, 2012

Tax, road issues remain for wind turbine project

By Matt Sanctis, Staff Writer, Springfield News-Sun, 15 March 2012

URBANA – A large-scale wind project that would build at least 54 wind turbines in Champaign County still faces hurdles – including possible tax breaks and road agreement issues with county officials – before it can move forward.

The first phase of the $20 million Buckeye Wind project is moving ahead after a 4-3 ruling in the Ohio Supreme Court this month.

Talks on taxes and on how to protect roads during construction have not yet begun between county officials and Everpower Renewables, the company in charge of Buckeye Wind.

Everpower has said some form of tax abatement is needed to allow the project to continue.

County officials are faced with balancing concerns about the project with revenue that could be generated for the county, townships and school districts.

Officials expressed concern about several aspects of Buckeye Wind, including its effect on property values, and the county’s legal and financial responsibilities if the project should fail.

Officials from the company said those scenarios are unlikely and 70 conditions set by the Ohio Power Siting Board ensure the project will protect the public.

Jason Dagger, a spokesman for Buckeye Wind, said the earliest construction could begin is late this year or early next year. A road agreement is needed protect county and township roads as heavy equipment travels through during construction.

Everpower also is working with the state to acquire a permit because the endangered Indiana bat has been found in the project area.

“We’ve still got time to work on those, and that’s our plan,” Dagger said. “We’re not sure exactly of the timetable yet.”

The issue has caused friction among county residents. Some believe it will generate tax revenue and provide renewable energy; others think the project has been sited poorly and will not generate enough money to make up for potential damage to the landscape.

Champaign County Commissioner Bob Corbett said officials are not taking the issue lightly. The county auditor, prosecutor and the County Commissioners’ Association of Ohio have been asked to research everything from taxes to how the project might affect property values.

The problem, Corbett said, is there are still more questions than answers. He said it is important that the county takes the time to make the right decision.

“This is our place, and we want to do as good a job as possible,” Corbett said.

Much debate centers on how the project will be taxed. Under legislation passed in 2010, qualifying renewable energy projects could be exempt from paying tangible personal property taxes. Instead, they would be responsible for a Payment In Lieu Of Taxes to local schools and governments.

Under the PILOT program, projects such as Buckeye would pay between $6,000 and $8,000 per megawatt, depending on how many Ohio employees are used during construction. Commissioners can impose additional fees, not to exceed a total of $9,000 per megawatt of energy produced by the project.

About 54 turbines are in the first phase of the project, but the model of turbine has not yet been decided. A 2 megawatt turbine, for example, could generate as much as $18,000 per turbine in local taxes.

Revenue generated would be split between local governments and the county’s general fund.

Michael Speerschneider, a spokesman for Everpower, said the state’s previous method of taxation before SB 232 was not designed for renewable energy.

“If we don’t get that tax treatment, it would be hard for the project to compete with any project in surrounding states,” Speerschneider said.

Julia Johnson, a local resident who opposes the project, said the bigger problem is that the turbines require federal tax breaks, state mandates and local tax incentives to operate.

“I think at the end of the day, it’s more an issue that it’s not sustainable,” she said.

Corbett said revenue cannot be the only deciding factor.

“This tax thing is a major issue,” Corbett said.

Karen Bailey, county auditor, said the project will likely lead to reduced property values in cases where views are impeded because the 490-foot tall turbines would be considered a “nuisance or a hazard.”

Dagger disagreed, saying projects in New York and Pennsylvania have not seen reduced property values.

But Bailey said the proximity to nearby homes will likely lead to a reduction. “I feel that just because of the location that it will affect property values,” she said.

Bailey and Prosecutor Nick Selvaggio have raised other questions, including the financial responsibility of the county in case the project fails.

But Dagger said that scenario is unlikely, in part because of increasing demand for electricity. He said the likelihood of new coal or nuclear projects is unlikely and said energy sources such as wind and solar will be necessary. Even if the project failed, a bank or other investor would be appointed by the courts and would be responsible for the project under the same set of conditions as Everpower, he said.

Selvaggio said his office would not make any recommendations to the commissioners solely based on economic interests. At the same time, he said the siting board and supreme court decisions did not sufficiently address several of the risks the county might face. He said his office has remained neutral but said the unanswered questions must be taken into consideration moving forward.

“As a result, I believe that this is something the board must consider when evaluating the tax implications of declaring county lands ‘alternative energy zones’ and accepting a PILOT payment in place of traditional taxing practices,” Selvaggio said.

URL to article: