Library filed under Taxes & Subsidies from Kansas
A payment in lieu of taxes agreement signed Tuesday by county commissioners will yield an annual donation of $900 per megawatt to the county but will be adjusted for money the wind farm pays in expenses. “The county will receive at least $100,000 per year."
But because of those exemptions, almost $630 million of wind-farm equipment will never be taxed. If it were, it would generate around $82 million a year for the 24 rural counties with wind farms.
Wind farms have offered less of an economic boon than the industry had promised ...“Some studies produced by consultants assumed larger spillovers from the wind projects to the local economy. Our research showed that the spillovers were likely to be much smaller than their assumptions.” [T]he majority of the economic effect of wind farms benefits local landowners who lease plots to the farms.
Executives of seven wind energy companies pressed Gov. Sam Brownback to lobby the state’s congressional delegation in opposition to a cut in a federal tax credit that could derail $1.5 billion in planned projects across Kansas.
Kansas companies that produce energy from wind, solar or other renewable resources would lose their property tax exemption under a bill discussed by a Senate panel Monday. Such companies have been exempt from property tax since 1999. A bill discussed by the Senate Assessment and Taxation Committee would instead give those companies a 10-year exemption starting with the launch date of each project.
CU has an agreement with Smoky Hills Wind Project to purchase wind energy, but Smoky Hills says a series of “curtailments” caused CU to buy less energy and for Smoky Hills to receive less value in tax benefits.
A state representative and a senator told a Wichita Republican audience Friday that they think they’ll have more success next year in repealing a law that requires Kansas public utilities to get some of their power from wind.
You cannot deliver wind energy standalone — rather, it must “merge” into existing base load, whatever the source. That merging and “demerging,” when the wind dies suddenly, presents special grid-balancing challenges to base-load providers, which adds to the cost of electricity.
The late extension of the federal Production Tax Credit in 2013 resulted in a 92 percent drop in completed installations nationwide ...That tax credit expired at the end of last year, and its future is iffy. In addition, in Kansas, wind energy has come under attack from powerful groups that want to do away with the Renewable Portfolio Standard.
Siemens Wind Power has clarified earlier statements to make it clear that while they're opposed to short-term government subsidies, the company still supports long-term tax breaks for the wind power industry.
According to the American Wind Energy Association (AWEA), Kansas is leading the U.S. in new wind farm installations this year. By the end of the year, eight new utility-scale wind projects will come online - representing approximately $3 billion in new investment - and the state will have more than doubled its installed wind power by adding 1.489 GW of new wind power capacity.
"There's no money tree in Washington, D.C.," responded Huelskamp, opposed to renewing the subsidy set to expire at the end of the year. They pressed him about his support for other incentives benefitting agriculture and oil and gas. He criticized the comparison and defended his stand. ...Reno County resident Wayne Johnson told Huelskamp it was refreshing that Huelskamp was "holding firm."
Wind power is horizon blight. It's also what economists call rent-seeking. "Rents" are what you get when you're a political crony and you convince the government to take money from others and give it to you. The country would be better off with fewer rent-seekers feeding on the federal budget.
It's still possible that a wind subsidy might work its way out of the Senate yet this year, but the U.S. House of Representatives is another matter. The House includes a large contingent of staunch conservative budget hawks and opponents of alternative energy subsidies, including U.S. Rep. Mike Pompeo, R-Wichita. He said the House is highly unlikely to pass any bill with alternative energy subsidies.
On wind, he said he opposes a measure called the Renewable Energy Standard that requires utilities all over the country to use a certain percentage of wind-generated electricity, although he has supported other wind tax credits. Renewing the production tax credit for wind farms in 2012 will be difficult, he said.
Wind turbines in Kansas could be taxed by the state and local governments under legislation supported Friday by a group of western Kansas officials. A bill before the House Taxation Committee would eliminate the lifetime property tax exemption granted in 1998 to renewable energy resources and technologies. The Kansas Legislative Policy Group, a coalition of 30 county commissions in western Kansas, offered the sole testimony in support of the change Friday.
Iberdrola of Spain, owner of Elk River, realized over $9.9 million in PTC allowances in 2007. Foreign companies are not regulated by the Kansas Corporation Commission. There are no state or federal regulations of any kind on WECS. Few Kansas counties have wind regulations. WECS will force consumers to pay for their electricity three times; to build the WECS, build conventional power as backup, and additional transmission lines to carry power from the WECS to the grid. WECS will not produce large economic benefits to a community as evidenced by records from Gray County (Montezuma), or Butler County (Elk River). Elk River has produced seven jobs. Most employees live outside the community.
Gov. Kathleen Sebelius spent a day this week in Houston, the city of big oil, to promote another energy source -- big wind. In her speech Monday to the annual convention of the American Wind Energy Association, Sebelius called on the federal government to renew its production tax credit for wind energy due to expire at year's end. She urged Congress: "Make it clear to investors that this incentive will last for several years." The governor's message echoes a concern of wind developers, who complain they can't make plans to build in places such as Kansas without a multi-year tax credit in place to boost their emerging industry. The U.S. Senate recently approved a single-year extension, but the bill remains pending in the House.
A decision by the Kansas Corporation Commission has led Westar Energy, Inc. to suspend plans to develop 200 MW of wind power by the end of 2010. ...The company said the order also indicated that in the future wind generation could be subject to "undefined operating standards" and "potential financial penalties" that have not been imposed on other forms of generation. ...In its order, the commission said it concluded the circumstances do not justify allocating to ratepayers the cost of an additional 1 percent return on investment in light of the uncertainties inherent in wind generation and the narrow margins as to whether purchased power agreements or ownership is more costly. The commission also said an incentive mechanism to maximize wind energy output is not necessary at this time. It plans to revisit the issue in two years.
State regulators are saying Westar Energy Inc.'s plans to invest in wind power are prudent but aren't allowing the utility to increase its profits. The Kansas Corporation Commission's decision created uncertainty about Westar's plans to invest in 295 megawatts of generating capacity from wind farms in three counties, enough to power 88,000 homes. ...Construction costs and the fact that wind doesn't blow consistently means that electricity from wind turbines more expensive per kilowatt hour in the short term than power from coal-fired plants. But commission spokeswoman Rosemary Foreman said Westar shareholders' risk was lessened because regulators will permit the utility to recover its investments in wind farms through its rates. "The commission just didn't think it justified, the ratepayers paying an additional cost," she said. "The risk to the company is minimized."