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Devaluation of wind farms to hit government coffers

The other major reason valuations have dropped, he said, is that some projects are not producing energy at the level they were expected to. "After they are operating for a few years you can see whether they are producing better or worse than expected." But, on the whole, production is less than predicted.

A sudden and dramatic drop in the value of Kern County's massive wind energy farms will strip millions of dollars out of government coffers this fiscal year.

The Kern County Assessor-Recorder's office has warned county officials that they expect to drop wind energy property value by $777 million less than three months into the fiscal year.

County budget officials estimate that will strip $1.8 million from the county's main operational fund and $900,000 from taxes used to run the Kern County Fire Department.

Other governments -- cities and schools and special districts -- could also lose revenue.

Assistant Assessor Tony Ansolabehere said that when the Assessor's office delivered the annual property value report to county budget builders, appraisers had not calculated the values for wind farms.

They warned budget officials they were using the old values, he said, and that numbers could change.

His office had only two months, in May and June, to estimate the value of Kern County's massive oil fields and the massive swaths of wind turbines that have cropped up across eastern Kern County in the past few years, Ansolabehere said.

"We just didn't finish the wind roll," he said.

In late August, the county used the more rosey, incomplete property value numbers to button up major holes in county spending plans.

Jobs were saved with the money. Programs were protected.

Assistant Kern County Administrative Officer Nancy Lawson said the county budget is expected to lose around $2.7 million.

It's a blow. But it is not, she said, a big enough hit to force the county to re-open the budget and adjust spending.

The county builds a cushion into its spending plan for changes in tax values, she said, and that cushion is big enough to handle the shortfall.

But that money is usually used to pay off property owners who win a legal appeal with the county over the size of the property tax bill.

This, however, is a permanent change to the value of wind energy developments.

Lawson said the county will have to absorb that reduced revenue into all future budgets.

And, with the county facing major funding challenges in the form of new jail staffing, pension costs and transportation spending, less money is bad news.

Ansolabehere said the drop in wind energy values came for a number of reasons.

In the first year that a new wind energy project is active, he said, the operator gets a check from the federal government that covers 30 percent of its value.

That check doesn't come in the second year.

So, Ansolabehere said, the value of a wind project often drops dramatically in the second year.

The other major reason valuations have dropped, he said, is that some projects are not producing energy at the level they were expected to.

Some wind energy farms are over-achievers, Ansolabehere said.

"After they are operating for a few years you can see whether they are producing better or worse than expected," he said.

But, on the whole, production is less than predicted.


Source: http://www.bakersfieldcalif...

SEP 28 2014
http://www.windaction.org/posts/41306-devaluation-of-wind-farms-to-hit-government-coffers
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