Ohio's tax structure could blow holes in the state's plan to become a major wind energy center, a national wind trade group says.

In a letter to Gov. Ted Strickland, the American Wind Energy Association argues that Ohio's tangible personal property tax on electric utilities could drive wind developers to neighboring states.

Other Ohio businesses no longer pay tangible personal property taxes, which are imposed on a utility's equipment, such as generators and wires.

Hans Detweiler, the association's manager of state legislation and policy, wants the tax eliminated and warns that Michigan, Pennsylvania, Indiana, West Virginia and Illinois all have a more attractive tax structure, because they have eliminated or sharply reduced tangible personal property taxes.

The wind group wants Ohio to replace the tax with a "production tax" on each kilowatt-hour of electricity a wind turbine generates.

"This approach has the benefit of being simple and transparent, compatible with federal tax credits," Detweiler wrote to the governor.

"We respectfully request that you work with us to craft a more comprehensive solution, a solution that will provide flexibility and efficiency for developers seeking to invest a minimum of $6 billion in Ohio's economy."

Detweiler could not be reached Friday. The Strickland administration has already made it clear it is not about to be buffaloed into making wholesale changes in tax policy on short notice.

"We would like to see a total comparison of taxes in other states," said Mark Shanahan, the governor's energy adviser and the executive director of the Ohio Air Quality Development Authority.

"We think a number of their concerns are not accurate," he said, adding that a number of wind developers are talking to the air quality board about tax-free bonds to finance their Ohio projects.

"We are looking at this letter from Mr. Detweiler as the difference between the position a trade association takes and individual projects," Shanahan said.

Still, the issue could be crucial to breathing new life into Ohio's struggling manufacturing economy.

Big wind turbines can't be moved far and usually are assembled close to where they will be used. Assembly plants, using parts also manufactured nearby, could resurrect manufacturing companies that have relied on the auto industry.

The need for the wind and solar development has already been created.

Ohio's lawmakers last year approved a Strickland plan to require utilities to generate 12.5 percent of the power they sell from renewable technologies such as wind and solar by 2025. Half of that must be generated in Ohio.

Then-Ohio House speaker Jon Husted added annual renewable energy benchmarks, starting at 0.25 percent this year and increasing slowly through 2013, then jumping a percentage point a year to 12.5 percent by 2025.

The Kettering Republican, now in the Ohio Senate, said the wind trade association raised an issue that must be examined because neighboring states also have renewable energy mandates.

"They a make a pretty good case about what is going to be harmful for investment in Ohio," Husted said.

"But we have yet to hear the counterpoint. If you are going to do this for wind, what are you doing for other types of suppliers, whether they be traditional coal and nuclear or other forms or renewable, like biomass and solar?"

Shanahan agreed that any changes in the tax code would first require a comprehensive review of taxes for all utilities.

"That is much more difficult to do, but that is the only way to do it fairly, so as not to give an unfair advantage to solar or wind," he said.

For certain, the issue is not going to be solved before the Senate approves the governor's budget by the end of June, he said.

And the tax money involved is considerable. Tangible personal property taxes from gas and electric utilities paid in 2008 totaled more than $620 million, according to the Ohio Department of Taxation. Most of the money went to local governments.

In the Ohio House, State Rep. Jay Goyal, a Mansfield Democrat, heads a special committee looking at the state's options.

The committee is meeting with utility representatives, wind developers and local government officials.

"It would be my hope that we can get something done before the recess this summer," Goyal said.

He said the just-formed committee has not even concluded that an immediate change is necessary because the state already has the "tools" to give the tax relief to wind developers. And not just tax-exempt financing.

For example, designating an area under consideration for wind development as an "enterprise zone" would reduce taxes, he said.