Wind farm tax bills could bring a windfall for local communities 

Both houses of the Missouri General Assembly heard bills Tuesday which could close a loophole that allows investor-owned utilities to distribute the taxable value of wind-farms across the entire electric grid.

Currently investor-owned utilities like Ameren Missouri can distribute the taxable value of power-generation equipment like boilers, communication and substation equipment across the state. Both bills would exempt wind farms from this provision of state law and assess the value of wind farms at the local level. Private utilities already pay taxes on wind farms only to localities that house the property.

Missouri has six wind farms, all in the northwest corner of the state, and they produce about 458 megawatts of power, according to the Kansas Energy Information Network. No public utilities currently own wind farms in Missouri. Ameren plans to buy power from a 400-megawatt wind farm under development in northeast Missouri. The utility also plans to buy the 157-megawatt Brickyard Hills wind farm being built by a different developer in Atchinson County.

State Rep. Allen Andrews, R-Grant City, told the Senate Ways and Means Committee on Tuesday morning his bill will ensure that tax revenue from wind farms remains in localities with wind farms, regardless of whether utilities build wind farms or buy them after they become operational.

“Some of these wind developments would not have happened if the landowners did not think that money was going to support local schools or ambulance district or fire departments,” Andrews said. “The land owners would not allow wind turbines to be put up.”

Missouri Tax Commission Chairman Bruce Davis said Ameren’s Callaway Nuclear Generating Station pays both distributable and non-distributable property taxes. Under Missouri law, tax revenues from nuclear reactors, cooling towers and plant equipment also may be distributed to localities on the electric grid. Equipment used to distribute power across the state gets distributed across the grid.

Items consumed locally, like fuel, get taxed at the local level, Davis said.

“There’s some value that’s locally assessed and the rest of that is distributed throughout miles of property, depending on the type of property we’re talking about,” Davis said.

Ameren is preparing to shut the nuclear plant down and spend $29 million to refuel the power plant this spring. Each year Ameren pays about $9.8 million in property taxes and about $6.8 million goes to schools, most of it to the Callaway County R-II School District.

In March some Harrisburg residents expressed support for a proposed wind farm near Harrisburg. Chicago-based E.ON Climate and Renewables informed landowners near Harrisburg in February it wants to explore building a wind farm in the area. The company recently began a two-year experiment to see whether the area houses the right wind conditions for a wind farm.

Others expressed concern a new tax revenue source would dry up if an investor-owned utility like Ameren bought the wind farm. E.ON Climate and Renewables expects to get European approval for a merger with German energy conglomerate RWE this summer, according to the Financial Times. Still, Ameren, Kansas City Power & Light or other investor-owned utilities have not expressed public interest in buying the Harrisburg project from E.ON.

Steve Combs, Harrisburg R-VIII School District Superintendent, did not respond to calls seeking comment.

Boone County Presiding Commissioner Dan Atwill said the project is in its early stages and the commission has not formally addressed E.ON’s wind farm with the Harrisburg school district. Atwill knows the project will carry a large tax burden, but felt uncomfortable commenting on either bill because he was unfamiliar with the legislation.

If planning for the wind farm ever begins, it will begin with the Boone County Planning and Zoning Commission, Atwill said.

“We will look at all the data we can and give this clear consideration,” Atwill said.

Ameren Government Relations Director Tina Shannon did not say whether Ameren supports either the House or Senate bill, but said Ameren supports wind energy projects.

“Wind generation brings a host of benefits to Missouri including hundreds of construction jobs per project, decades-long lease payments to landowners as well as permanent, well-paying jobs to rural communities,” Shannon said in an email. “Taxing wind facilities at a local level is an option that we support exploration by the local communities in an effort to encourage investment in Missouri’s wind energy future.”

The House Utilities Committee also heard Tuesday night from state Sen. Cindy O’Laughlin, R-Shelbina, on the Senate’s sister version of Andrews’ bill.

Andrews’ bill passed the House 151-1 on March 7. O’Laughlin’s bill passed the Senate 32-1 on Feb. 28.

The Senate Ways and Means Committee and the House Utilities Committee will both likely vote on the bills next week.

These bills will help build community support for wind projects, Andrews said.

“In order to build a wind development in Missouri, you’ve got to have community buy-in,” Andrews said.