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Legislator proposes wind generation tax to level playing field  

Credit:  Jill Schramm, Staff Writer | Minot Daily News | www.minotdailynews.com ~~

A Minot representative is proposing a tax on wind generation to help level the playing field for coal in North Dakota.

Rep. Roscoe Streyle’s House Bill 1372 would assess a tax on wind plants of $1.50 per megawatt-hour of electricity generated and a tax equal to 10 percent of the production tax credit granted to the wind facility. The bill directs most of the new revenue to the state’s general fund. Forty percent of the $1.50 per megawatt-hour would go back to the county or counties in which the wind farm is located.

There is an existing tax of $2.50 per kilowatt times the rated capacity of the wind generator, and a half mill per kilowatt-hour of generated electricity. These taxes are distributed to counties and other local taxing entities.

The House Finance and Tax Committee is taking testimony on the bill today.

At a legislative forum in Minot Saturday, Streyle described the tax breaks going to wind as “absolutely ridiculous.”

“It does affect our coal industry, which is producing less coal every year,” he said.

The Lignite Energy Council reports 27.7 million tons of lignite coal were produced in North Dakota in 2016, down slightly from the five-year average of 28.1 million tons. The 2016 total ties 2013 production, although down about 1 million tons from 2014 and 2015.

“Production at North Dakota’s five lignite mines continues to be steady due to long-term contracts and the competitiveness of low-cost, coal-based electricity,” Jason Bohrer, president and CEO of the Lignite Energy Council, said in a statement released Jan. 24. “Production totals were affected by outages at a couple of power plants. In addition, electricity produced from wind generation in our region continues to put pressure on the seven lignite-based power plants in the state.”

The largest lignite mine in the world – the Freedom Mine north of Beulah – sold the most coal in the state during 2016. More than 14 million tons of lignite were produced and sold to the Antelope Valley Station, Leland Olds Station and the Great Plains Synfuels Plant. All three plants are owned by Basin Electric Power Cooperative, which is opposing HB 1372.

Dale Niezwaag, senior legislative representative for Basin Electric, said the bill will cost the cooperative nearly $900,000 a year. Basin Electric operates the Prairie Winds wind farm south of Minot. Its purchase power agreements also call for Basin Electric to split the cost of any new tax.

“It’s a tax that gets passed on to the end consumer,” Niezwaag said.

The impact of the tax on consumers hasn’t been calculated but likely would be small, although it would depend on electrical usage. Verendrye Electric Cooperative has estimated the average farm household in the Minot region uses about 1,500-kilowatt hours a month, or 1.5 megawatt-hours.

“Anytime we hear talk of a tax on generation of electricity, it’s concerning,” said Josh Kramer, general manager for North Dakota Association of Rural Electric Cooperatives, Mandan. NDAREC represents 16 distribution cooperatives as well as five generation and transmission cooperatives, including Basin Electric and Central Power.

Although the association supports the use of coal, it also supports a balance of energy types, he said.

Niezwaag said Wyoming is the only state in the region that levies a similar tax.

“It’s a reasonable thing to say that the state should be getting some of the revenue if they are providing incentives, and there’s probably ways to do that. I don’t know if this is the way to go,” he said.

“It’s unlikely it’s going to pass,” Streyle said of the bill. “But the point of it is to show how ridiculous our energy policy is and how it affects us here when wind is given top priority.”

Source:  Jill Schramm, Staff Writer | Minot Daily News | www.minotdailynews.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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