Library filed under Taxes & Subsidies from Michigan
Exelon officials told county planners the company will follow the same format set by DTE Energy, which included a third-party surety bond as well as a corporate guarantee. Exelon officials said the financial assurance it originally offered is the same the company used in other projects. It's not acceptable to the county and the company understands that.
The coalition had been working on obtaining the data the State Tax Commission used last fall when it made the changes that would lower the taxable value of wind turbines. An initial response to a FOIA request seeking "a copy of that research that led to the change" stated that no documentation exists with the Michigan Department of Treasury. In the response to a subsequent FOIA request, Douglas writes, "the basis for change was common sense," because the commission could not find any sales studies for used wind turbines.
As the certainty of steady revenue from local wind developments remains up in the air, a lingering question on the minds of some local officials is just how serious wind developers are about their support for long-term tax revenue for local units of government. "Today, I'd like to ask just what kind of partners they really are," said Rep. Kurt E. Damrow, R-Elkton, on Wednesday.
Wind companies pay personal property taxes for wind developments, and the taxable values are established by the Michigan Tax Commission. Those values decrease each year because of depreciation. And, per an October ruling, there will be a larger than previously established drop in values this year.
A recent personal property tax ruling that will cost Michigan counties millions of dollars in revenue could prove vital for utility companies and energy manufacturers around the state.
But the State Tax Commission changed the tax code in early December so that turbines are now taxed at 80 percent on the first year and that drops to 30 percent within five years, Damrow said. The loss of tax revenue is significant in counties where large wind farms are under development.
Huron County Board of Commissioners Chairman Ron Wruble said the news is "pretty disturbing" as local taxing units will collectively receive $267,077 less in tax revenue from the area's two existing wind developments. Under the old way turbines were taxed, the area would have received $913,585.
County officials on Tuesday pitched a concept of working in concert with wind developers to eliminate uncertainty the Michigan Legislature has created by proposing legislation to eliminate the personal property tax, which is the only tax revenue wind companies pay for wind farms.
Green, who represents the 31st District, which includes Huron, Tuscola, Sanilac, Bay and Arenac counties, said he does not believe wind companies will get away with not paying taxes. "There is discussion about different ways of getting local revenue for wind mills if the personal property tax gets written off," he said. Green's comments came after Huron County commissioners on Tuesday expressed concerns about Senate Bill 34 (SB 34), which eliminates all personal property taxes.
In the final few hours, however, there was an attempt by Rep. Jeff Mayes (D-Bangor Chtr. Twp.) to add a provision in legislation that would have exempted all property taxes on wind energy devices. Currently, wind turbines and related property are taxed as personal property with revenue going to local governments. ...no action was taken by the Senate on the legislation.
"If we discovered gold in Huron County, would we invite people in and give them a tax abatement to dig our gold out? Probably not - we'd ask them to leave us a little something behind," Krause said. " ... That person struggling to pay their property taxes ... wind developers should pay the same things that they pay."
Michigan's drive to renewable energy is generating concern about higher electricity prices. The issue: How, and at what price, will utilities or other energy providers build or purchase renewable power to meet a proposed state mandate that 10 percent of power come from renewable sources by 2015? "They really have to start going to town in a short period of time. And doing that, whether they're building or buying, there will be an additional expense that comes with it. And that's going to come back to the ratepayers," said Chuck Hadden, vice president of government affairs for the Michigan Manufacturers Association.
We applaud any effort to offer incentives to increase the use of renewable and alternative energy sources to power Michigan. But we hope the 25-percent goal can be reached by offering incentives, not by issuing mandates. The cheapest source of energy in the United States is coal. For the time being, at least, renewable sources of energy are a more expensive alternative. It would not bode well for economic development in Michigan if the state had astronomical energy costs.
Some lawmakers want residents to go green - energywise, that is. They’ve proposed giving residents who buy renewable energy an annual $100 tax break.
Gov. Jennifer Granholm vetoed a wind energy tax credit that Midland Republican Rep. John Moolenaar proposed. Moolenaar said Friday he hopes state lawmakers and the governor will agree to encourage "renewable energy." He thinks the veto was "more symbolic than anything else," he said. Granholm's veto letter said the state "continues to face enormous fiscal challenges" and should be on solid fiscal footing before offering tax incentives. On Thursday she also vetoed a bill that would have provided a tax incentive to people who donate to umbilical cord stem cell banks and other unrelated tax incentive bills. Another veto killed a bill to give incentives that supporters said were meant to preserve farmland in Michigan.
The state Legislature wrapped up its 2005-06 session Thursday and early Friday by sending dozens of bills to Gov. Jennifer Granholm. Among them: WIND POWER: A bill that would offer a tax credit for harnessing wind energy overwhelmingly passed the House and is headed to Granholm’s desk. The legislation would provide a tax credit of 1.5 cents per kilowatt-hour of energy generated for a taxpayer who owns a windmill or wind turbine, with no taxpayer receiving a credit of more than $750,000 per year.
If Moolenaar’s House Bill 4647 becomes law, a taxpayer owning a small wind turbine in Michigan to generate energy could claim a tax credit of 1.5 cents a kilowatt hour generated in a tax year.
Michigan’s 21st Century Energy Plan is to be released by the end of the year, and utilities and environmentalists are weighing in on what the program should contain. State regulators are considering whether a certain percentage of Michigan’s electricity must come from renewable fuel sources such as solar, wind and hydroelectric. Twenty-three states and the District of Columbia have targets, with dates, for renewable energy sources, ranging from 1% to 25% of total power. For example, Illinois recently adopted a voluntary standard of 25% of energy from renewables by 2017. Michigan utilities currently generate less than 8% of their electricity from renewable sources.
Every month, customers of Consumers Energy pay a tad more on their utility bill to subsidize renewable energy in Michigan, and it's an even bet most don't even know it. ...It's only a measly nickel, and for what some believe is a noble cause. But Michigan Attorney General Mike Cox wants to yank the plug.
The Green Generation program offers Consumers Energy's 1.8 million statewide electric customers an opportunity to support renewable energy by voluntarily enrolling in the program and paying a small premium. Payment options range from purchasing a "green block" of power for as little as $2.50 per month, to matching current monthly usage for approximately $12 - $14 per month.