October 27, 2021
Michigan

Townships’ wind turbine tax appeals going to Court of Appeals

Ruling not expected for at least a year | Robert Creenan | Huron Daily Tribune | Oct. 27, 2021 | www.michigansthumb.com

The next chapter in Huron County’s wind turbine taxation troubles has started.

Bloomfield and Sigel Townships have filed a new extensive appeal brief in the Michigan Court of Appeals against its ruling that it owed back taxes to DTE over wind turbines.

The Michigan Tax Tribunal issued an opinion and judgement in June in favor of DTE, which had sued to lower its tax commitments to the townships, county, and school districts. It was the first such commercial wind turbine tax appeal to proceed to hearing in Michigan.

Carl Osentoski, the executive director of the Huron County Economic Development Corporation and for the Michigan Renewable Energy Collaborative, said the Court of Appeals will review the filings made by the two townships and DTE and either decide to go to oral hearings or send it back to the tax tribunal. The Court of Appeals is normally the final arbitrator in matters like this.

“What the Court of Appeals will decide is whether our claims are justified, if DTE’s claims are justified, or if it’s a mixture of both,” Osentoski said.

The tax refund exposure for the years 2016-2021 potentially resulting from this opinion is over $1 million. The taxing units at risk for being impacted include fire departments, the Huron County Road Commission, the Huron Intermediate School District, other county school districts, the senior citizen’s millage, and the veteran’s millage.

There are also 18 other wind parks under appeal in Huron, Tuscola, Gratiot, and Isabella counties. Eight are owned by DTE, three by Consumers Energy, six by Exelon, and one by AEP Renewables. Tax refund exposure with respect to all wind parks under appeal exceeds $20 million, with the major concern being tax appeals coming.

“We’re hopeful that the Court of Appeals will say this is our finding on this case and it can be applied to all other DTE cases,” Osentoski said. “We have to see what the determination is. It does not include Consumers Energy and the other. Those may have to go through the same process.”

Over 1,000 tax appeals have been filed on the turbines as the county and operators have used different taxation tables for years. Those appeals may be settled depending on the outcome of this case.

New turbine taxation rules had been introduced in September in the state Legislature, which would set a taxation table of decreasing value over a 15-year period, then have the turbines taxed at 30% their original value after 15 years have passed until they are decommissioned. The proposed legislation has the support of local state lawmakers Rep. Phil Green and Sen. Dan Lauwers.

“By resolving the protracted and costly tax litigation, our local governments will be able to use the promised funds for key services and not spend those funds on attorneys and appraisers defending claims by major utilities and other renewable developers that their wind parks are obsolete,” Ostentoski said.

DTE must file its response and its cross-appeal brief in November, with a final decision by the Court of Appeals not expected for another year. Osentoski said a verdict could come sooner depending on the Court of Appeal’s workload and how quickly the filings are made.