July 27, 2013
Michigan

Energy companies question turbine values

BY NICH WOLAK, Tribune Staff Writer | Huron Daily Tribune | July 26, 2013 | www.michigansthumb.com/

BAD AXE – The turbulent situation between the county and wind developers has taken a new course, as energy companies have appealed the assessment of 55 turbines. The difference in proposed tax values comes to more than $67 million. DTE had the majority of the appeals, with 49.

This according to Huron County Commissioner Ron Wruble, who brought in a spreadsheet to Tuesday’s board meeting.

The dispute’s roots go back the fall of 2011, when the state tax commission lowered the taxable value of wind turbines. Wind turbines went from a 100 percent assessment in year one, with a scheduled depreciation to 30 percent value in 15 years, to an 80 percent initial assessment, with a depreciation to 30 percent value in six years.

However, local assessors and boards of review can go by the old depreciation schedule if they feel it more accurately describes the true cash value of turbines.

The board was not surprised by the situation. In September 2012, it joined several other wind-turbine-heavy counties in forming the Michigan Renewable Energy Collaborative (MREC), after DTE decided to file an appeal with the Michigan Tax Tribunal for turbines in Wheeler Township. The collaborative was formed to unite support for its cause and share legal fees.

It is unclear whether the appeals will end up in court, but if so, the collaborative will cover the cost.

The board currently has its eyes set on both Wheeler and Bethany townships, which are attempting to negotiate a compromise with DTE.

Wruble said that the negotiations are expected to end one way or another soon. He said a compromise would set a precedent for the state in a sense, but that the parties technically only represent one wind company and two townships.

A potential compromise that has been floating around would keep turbine values at a 100 percent value in year one. If accepted by companies and MREC that would reverse the 2013 appeals, as they would be the same figure. But the proposed trending table has a 20 percent drop in year two, and a 10 percent drop in year five, reaching 30 percent in year 10. While it would be a quicker decline in values than the original table, it would be less than the current one, which starts off at 80 percent value, and gets to 30 percent in year six.

Commissioners often talk about the state’s bias in favor of more populated municipalities, perhaps in no issue do they feel that way more than with turbine taxes. The energy companies tend to reside in metropolitan areas, but their turbines are placed in rural communities.

“There are 83 counties (in Michigan) and there are seven counties that are in MREC,” Wruble said. “How many legislators are representing windmill districts? … We don’t have a lot of pull or leverage, so to speak.”