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Duke wind farm tax deal means $800K less for Converse County  

Credit:  By ADAM VOGE Star-Tribune energy reporter | March 11, 2013 | trib.com ~~

A tax settlement between the state and a wind company will cost Converse County more than $800,000 in revenue – cuts that will hit library, hospital and school budgets.

After a round of negotiations between the Wyoming Department of Revenue and Duke Energy, owner of the Top of the World wind farm north of Glenrock, the state has agreed to value the property at $296.9 million, far less than its original valuation of $414.7 million.

The new agreement, among other things, means the project will pay $820,000 less in taxes to districts in Converse County. The county’s treasurer, Joel Schell, said that the county proper can bounce back from its share of the loss – about $125,000 – but other tax districts will have a harder time.

“It will be the smaller districts – the library, the hospital – that will feel the impacts,” he said. “It’s certainly a disappointment.”

The issue arose last fall when Duke Energy challenged the state’s valuation of the project. Company officials said the state overestimated the fair market value of the project, presenting an independent assessment closer to $225 million – a little more than half the state’s estimated value. Because of the disparity, the company elected to appeal.

“Just like any taxpayer, we thought at that point it was prudent to appeal the value and look into it more,” said Tammie McGee, the company’s communications manager.

Discussions between the company and the state Department of Revenue showed that the state had appraised the property using a model which based tax value off how much it cost to build and implement the project, a formula which would return greater appraisal values.

The company asked on appeal that a different approach, based more on potential income generation of the project, be used.

The appraisal was also adjusted after state officials learned the company carried a non-transferable federal grant on the project. Because the grant could only be used by Duke, the project’s resale value would take a hit.

The final appraisal reduced the project’s total taxable value from $47 million to $34 million. The company will pay $2.1 million in taxes on the property rather than the $2.9 million first determined.

Schell said the Glenrock Solid Waste District will lose about $41,000 in tax revenue, while the Glenrock Hospital District will lose $17,000 and the Glenrock Library will lose about $14,000. The smaller tax districts have smaller revenue streams and will therefore find it more difficult to make up the lost funds.

The county itself will lose about $126,000, but Schell said they can afford it.

“At the county we have sales tax, but those districts whose budgets are based on tax income they get, it’s more of a blow to them,” he said.

Schell also said Converse County School District 1 stands to realize $340,000 less in tax revenue from the project, but those funds will be made up by the Wyoming School Foundation, which itself will lose $163,000 after the appraisal adjustment.

The Converse County Board of Commissioners signed off on the deal at a March 8 meeting, but Schell said the board’s hands were tied.

“We had no choice but to accept,” he said. “The county’s options were to go find our own expert and to stand that against the state and Duke or accept the settlement.”

McGee said the company is sympathetic to the lost county revenue, but said the company will continue to do what it can to be a good corporate citizen. She added that the new appraisal is still higher than what her company’s contractor estimated.

“We’re trying to balance our obligation to the community with being a prudent taxpayer and taking our due process like any taxpayer would,” she said. “They say in the horse trading business that if everyone walks away mad, it’s probably fair.”

Source:  By ADAM VOGE Star-Tribune energy reporter | March 11, 2013 | trib.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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