Articles filed under Taxes & Subsidies from Texas
A deflating economy has taken the wind out of a massive Panhandle alternative energy project. Tight lending stalled a $2 billion wind farm project headed by billionaire oilman and alternative power proponent T. Boone Pickens. Pickens' BP Capital delayed work on a state permit to build 170 miles of transmission lines carrying enough wind energy to power 300,000 homes.
A wind tower manufacturing company, facing construction costs that were significantly higher than expected, received a shot in the arm Tuesday. Members of the Development Corporation of Abilene voted to approve Tower Tech Systems Inc.'s request for additional money -- up to $700,000 more -- to help cover nearly $7 million in unanticipated building costs.
Higher than expected construction costs has a wind-tower manufacturing company asking for more money -- $700,000, to be exact -- from the city of Abilene's economic development arm. According to Development Corporation of Abilene records, Tower Tech Systems, Inc., now estimate construction and equipment costs will reach $27 million, or about $7 million more as was estimated in DCOA's original assistance package.
Young County commissioners will continue to discuss a potential wind farm in northern Young County during a regular meeting of commissioners court at 9:30 a.m. Monday at the county courthouse.
[A] BP representative explained that the project could be phased in with 60 windmills possibly becoming available next year, and the remaining 40 coming some time later. Of the 60 windmills, David Gonzalez said, the majority are planned in Archer County.The change in the proposal was not met with enthusiasm by commissioners. ..."The prospect of an abatement has been based on a 250 megawatt buildout," Precinct 2 Commissioner John C. Bullock said. "The prospect of a phase in was not mentioned. If we had know that, it likely would have been different."
A tax credit driving the wind industry seemed to be on its way when the Senate approved it overwhelmingly this week, but a measure to extend it hit a speed bump Thursday in the House. The fate of the wind energy production tax credit expiring Dec. 31 is uncertain as lawmakers wrangle over two versions of the latest bill including an extension. An industry advocate found lawmakers' arguments over paying for the legislation absurd in light of billions spent to shore up crumbling Wall Street titans and a $700 billion proposal to stave off economic collapse.
Wind power and other renewables have their place in the energy mix. But since the federal subsidies for wind farms are so large, it's unclear Texas needs to provide additional incentives. These funds could be better used to raise teacher salaries and otherwise upgrade the quality of public education across the state. Removing or reducing the state incentives for wind generators will not by itself solve the education crisis in Texas, but it would be a step in the right direction.
Wind turbines are generating more than electricity in Coke County. They're also producing significantly more tax dollars for the Robert Lee Independent School District. And that's the problem. Under the state's "Robin Hood" school funding formula that takes from more affluent and gives to less affluent districts, Robert Lee ISD could end up benefiting little from the cash windfall. ...Under the present system, the state "recaptures" funds from property-wealthy districts and uses them to assist with financing public education in school districts deemed property poor.
When Young County commissioners began discussing details of the abatement with special counsel Alan Carmichael last week, the majority seemed very interested in finding a way to maximize the amount of money Young County stands to bring in if the farm is built. While that makes perfect sense up front, it could prove perilous to the entire project. With several other counties vying for wind farms from BP, it may not take much to sway the company one way or another. In Archer County, rumor has it that commissioners are planning to agree exactly to the proposal made by BP.
A lawsuit brought against the Taylor County Commissioners Court in April for granting what the plaintiff claims are illegal tax abatements to wind farms in the county was dropped Thursday with little fanfare. Tuscola resident Dale Rankin, an opponent of wind energy, filed the lawsuit in April alleging that wind energy equipment is not eligible for tax abatements under the state tax code. Rankin said he decided to "nonsuit," or essentially drop, the lawsuit because of what he called "procedural issues." However, he said he plans to refile the lawsuit.
A federal clock is ticking on an ambitious Texas Public Utility Commission plan to build transmission lines to funnel wind energy from West Texas to metropolitan areas. The wind energy industry revolves around a production tax credit that expires Dec. 31. After more than one false start, there is no guarantee Congress will extend it. Expansion will halt, some warn, if lawmakers don't take action this summer. "We don't want lines to just be standing out there," Sweetwater Mayor Greg Wortham said of the planned transmission lines. Wortham is also director of the West Texas Energy Consortium. Until a turbine is producing juice -- no credit.
Pecos County Commissioner for Precinct 3 Jay Kent speculated aloud about how much money the county was losing, but after a discussion the Commissioners Court approved unanimously Monday a tax abatement for the Sherbino II Wind Farm LLC, a development venture of British Petroleum Alternative Energy. The court approved the agreement with amendments. One removes a clause that requires an invoice be sent to BP each year, placing the onus for payment by Jan. 31 of each year of the abatement upon BP; the second specifies a public notice to other taxing entities.
Wind is always available and it doesn't pollute the planet. But as wonderful as it sounds, using the resource for energy could come with a hefty price tag. ...But there's a big problem. The Texas Public Utility Commission [PUC] hasn't approved a way to funnel all the power from the wind farms in West Texas and eventually the panhandle, into the Dallas/Fort Worth area. Ross points out, "The only impediment we have right now is the construction of transmission lines. We've got to construct the wires to move the power back to Dallas/Fort Worth." According to the PUC, that could cost at least $1 million per mile to get the power into the local area.
The Highland Independent School District learned earlier this month that it is a property wealthy district after being notified of its status by the Texas Education Agency. In TEA terms, Highland is a Chapter 41 district for the 2008-09 school year. Chapter 41 of the Texas Education Code makes provisions for certain school districts to share their local tax revenue with other school districts. ... The Highland ISD has been declared a Chapter 41 district because of significant increases in property values due to the new wind farms in the district. Nelson said those wind farm values will peak in the 2008-09 school year and then decline due to tax code Chapter 313 property tax limitation agreements ...
Much has been written about the merits or demerits of wind energy as a viable source of electricity generation for meeting the growing needs of electricity consumption in the United States. No matter which side of the debate one comes down on, one issue is crystal clear. Trillions of taxpayer dollars are being poured into the wind energy corporations' coffers to enhance the return on investment strategies with a guaranteed commitment by federal, state and local governments for a 10-year period. According to a recent report by the National Renewable Technology Laboratory (DOE), wind energy could account for 20 percent of the nation's electricity by 2030. To reach this target, wind turbines would have to produce 300,000 MW of power or 1,000,000 MW installed capacity. The 500,000 plus wind turbines would cost the taxpayers between $5-7 trillion.
Maverick oilman T. Boone Pickens' plan for a mammoth wind farm in the Texas Panhandle is a $2 billion bet that Congress will extend a tax credit critical to the environmentally friendly industry. ...But the [wind] industry has relied on federal tax credits to survive, a point Pickens made Thursday. "I believe that Congress will recognize that it is critical not only to this project, but to renewable energy in this country, that they enact a long-term extension of the Production Tax Credits," he said.
Released Tuesday, the 443-page Energy Report 2008 shows state and local subsidies of $1.4 billion on energy produced in Texas, plus a similar amount of federal subsidies for Texas energy. ...[Texas Comptroller Susan] Combs said Tuesday that subsidies can have unintended consequences -- especially when policymakers favor "winners" by providing greater subsidies for one fuel source over another. "Such assistance must be applied carefully," the report says. "Public policies that attempt to pick winners in the race for new energy technologies are an inefficient way to achieve policy goals and run the risk not only of wasting taxpayer money but also of directing private investment away from more promising use."
Two area wind energy opponents filed a lawsuit Monday against the Taylor County Commissioners Court for granting what the plaintiffs say are illegal tax abatements to wind farms developed within the county. According to the lawsuit, wind energy equipment is not eligible for tax abatements under the state tax code. In 2004 and 2006, Taylor County commissioners granted five tax abatements potentially worth $5 million to $10 million to three companies that have built farms of wind turbines in rural areas of the county. "That's my money the county is giving away illegally. We're asking the court to rectify this," said Dale Rankin, one of two plaintiffs in the lawsuit.
The Texas attorney general is looking at tax breaks for wind farms, and early signs are he doesn't think the law allows them. "Fixtures and improvements owned by the wind turbine company as personal property would not be 'real property' that may be the subject of a tax-abatement agreement," according to a legal opinion issued by Attorney General Greg Abbott on Jan. 29. The wind industry wants a another chance. "We have asked the attorney general to review it and take a second look," said Paul Sadler, executive director of The Wind Coalition. "If they will not, it may be necessary to tweak it in the next legislative session."
Hooking up the state's largest cities to rapidly expanding wind power projects in West Texas could cost as much as $6.3 billion in the coming years, the state's grid operator says. In a report this week to the state Public Utility Commission, the Electric Reliability Council of Texas, which oversees most of the state's power grid, listed five options for getting wind-generated electricity to the populous areas that need it. Even the least ambitious would cost almost $3 billion. Texas is the largest wind power producer in the country, with more than 4,400 megawatts of capacity installed — about 2 percent of the state's total power capacity, according to the American Wind Energy Association.