A second wind energy company is taking Tuscola County and local townships to court over wind turbine taxes – a move viewed as frustrating by county officials as much-needed tax revenue must now be set aside to cover potential court-ordered payments.
Jackson-based Consumers Energy Co. filed the petitions with the Michigan Tax Tribunal on May 31, contesting the assessed value of 62 turbines in its $250 million Cross Winds Energy Park in Akron and Columbia townships. Jackson-based Consumers Energy Co. filed the petitions with the Michigan Tax Tribunal on May 31, contesting the assessed value of 62 turbines in its $250 million Cross Winds Energy Park in Akron and Columbia townships.
Attorneys for Consumers allege in filings that assessed values of its turbines for the 2015-16 tax year were too high and that the company is due refunds for overpayment.
The petitions are similar to that filed by NextEra Energy Resources L.L.C. and/or its affiliates for wind turbines that are part of Tuscola I and Tuscola II “wind farms” in Gilford, Fairgrove, Akron, and Wisner townships. Hearings are scheduled for October on those petitions.
With Consumers’ new petitions, the assessed tax value of “most, if not all” wind turbines in Tuscola County are being contested by the wind energy companies, said Mike Hoagland, controller, Tuscola County.
“We’re frustrated,” said Hoagland. “If we lose the dispute, we have to have the money set aside to pay it back.
“We have sizable sums that have been escrowed,” he said.
Cross Winds Energy Park is a 111-megawatt wind turbine project that consists of 62 wind turbines – 43 in Akron Township and 19 in Columbia Township. The project is owned by Consumers Energy, a subsidiary of CMS Energy (NYSE: CMS) and began operating in 2014.
Dan Bishop, director of media relations for Consumers, told The Advertiser that Cross Winds is part of Consumers’ commitment to increase use of renewable energy as the source of the power it sells. Earlier this year, the company closed seven coal plants.
“Consumers Energy chose Tuscola County due to the wind resource and because the area offers access to available transmission – a key consideration when building a wind farm,” according to www.crosswindsenergypark.com, a website that includes information about the project.
“The Tuscola County townships where Consumer Energy built Cross Winds also offer wind ordinances that ensure public safety while providing the flexibility to develop and operate a highly productive wind farm.”
Futher, the website indicates Cross Winds “is estimated to generate millions of dollars in new tax revenue over the life of the project.”
According to Dennis Marvin, community engagement manager for Consumers, in 2015, “Consumers Energy paid property taxes in excess of $3.4 million related to its utility and electric generation investment in Tuscola County, including $3 million of new local property taxes (paid to Tuscola County, Akron, and Columbia Township and local schools) related to the Cross Winds Energy Park.”
A ruling from the Michigan Tax Tribunal, however, could change what the county received for the year if the court rules Consumers overpaid.
Marvin said the company needs to stay competitive by offering its customers the lowest rates. Part of that process is being “cost-conscious,” he said, when it comes to expenditures.
“Anytime there’s anything that affects our rates, we want to make sure we do our due diligence and are doing what’s necessary to protect any increased rate to our customers,” Marvin said.
Marvin said Consumers officials believe there is a significant difference between the state tax commission and local governing bodies over how the value of wind turbines are assessed, which ultimately affects how much the company is required to pay in taxes.
“We had reviewed with Tuscola County and the two townships what our tax guidance would be relative to the state tax commission,” Marvin said.
Following the review, he said, the company informed local officials that it would be filing its petitions with the state.
Don Schmuck, supervisor, Akron Township, confirmed a representative of Consumers called him and let him know the assessments would be contested. Schmuck mentioned the call at the township’s regular board of trustees meeting Thursday.
“It’s a matter of consistency and fairness,” Bishop said.
Hoagland said attorneys for the county are still reviewing the petitions.
State records show Consumers has filed similar petitions in Mason County.
Legal representation will come from attorneys representing Michigan Renewable Energy Collaborative (MREC), an organization of counties that includes Tuscola and Mason and has banded together to fight the legal challenge issued by NextEra – and now, Consumers Energy.