Tax payments to S.D. counties illustrate impact of wind energy tax credit

The new $363-million Crow Lake Wind Farm near White Lake, S.D., has just paid its first property tax bills to three rural counties in the amount of a very welcome $800,000, about $300,000 more than expected, according to delighted local authorities.

Basin Electric Cooperative operates the 162-megawatt (MW) Crow Lake wind farm, which paid $297,000 to Jerauld County, $257,000 to Brule County, and $239,000 to Aurora County, according to the Mitchell (S.D.) Republic.

The article quoted Jerauld County Director of Equalization Susan Jost as pointing out that the wind farm’s property tax payments are all benefits to local governments: “The landowner still pays the taxes like they always have. We did not lose any property tax dollars from the land. That did not change. All the money is an increase in taxes.”

Officials from three local school districts–Wessington Springs, White Lake, and Kimball–said the revenue will help them meet their budgets during a challenging time. White Lake School District Business Manager Carol Gillen said that without the tax money from the wind farm, her district would have had to either cut its budget further or to seek approval to go beyond state limits on tax increases.

Jerauld County Commission Chairman Larry Olson, who had supported the wind power project, put the effect on the county’s budget this way: “It means a lot. It makes an impact. We’ve got some road and bridge issues. We tried for an opt-out [going beyond the state tax increase limit] and that failed. Every dollar we get off those wind turbines is a blessing, that’s for sure.”

Many rural counties across the nation’s heartland have found that the expansion of the wind power industry, which has been supported by the federal wind energy Production Tax Credit (PTC), has been a godsend for local economies through:

– Payments to farmers, ranchers, and other landowners, who receive $3,000 or more annually for each turbine located on their land.

– Local property tax payments, as outlined above.

– A shot in the arm for restaurants, motels, and other local businesses as hundreds of construction workers come to town for several months to build projects.

– The addition of a modest number of long-term, skilled jobs in wind farm operations and maintenance.

These are just a few of the ways in which projects which have attracted investment thanks to the PTC are benefiting the economy. We’ve talked a lot on this blog about the new manufacturing jobs created in the wind power industry, but the positive impact it’s had on rural communities is equally striking.

The PTC provides an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from utility-scale turbines. It is set to expire on Dec. 31 unless Congress extends it first.

A House bill seeking to extend the PTC has 97 cosponsors, including 21 Republicans, while a Senate bill to extend it was introduced March 15 by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S. A PTC extension has been endorsed by a number of newspapers across the country, including the Houston Chronicle, The New York Times, the Denver Post, and the Daily Oklahoman.

Tom Gray,