Library filed under Taxes & Subsidies from Montana
A cutting-edge wind farm paired with battery storage cannot advance under what developers are calling unworkable terms set by Montana’s Public Service Commission. The PSC put the overall avoided cost of the energy at $6 a megawatt hour effectively killing the project, according Caithness.
Rosebud County commissioners have hit the pause button on deciding whether a $500 million wind farm warrants a 50% tax abatement. Commissioners tabled a proposal Tuesday to lower taxes on the Clearwater Wind farm to be located near Forsyth. In the works since 2012, 120-turbine farm will generate enough power to electrify 300,000 homes.
Solar energy advocates are asking a state court to overturn a decision by the Montana Public Service Commission that reduced the price for electricity generated at small renewable energy power plants.
On March 23 the USA division of the wind energy company, NaturEner, announced it had donated $50,000 to the Sunburst School District to help the small Montana town avoid having to lay off one or more of its 21 school teachers.
The wind-power production tax credit pays project owners $22 for every megawatt hour (mwh) of electricity they produce. In the Pacific Northwest right now, spot-market prices for electricity are averaging $25 per mwh. So, while sellers of other types of power get $25 per mwh, a wind-power plant will get $47 per mwh, with the subsidy.
After PPL Montana announced a plan to mothball its J.E. Corette power plant in Billings, likely eliminating 35 jobs and dealing a blow to the local economy, some blamed federally subsidized wind power as the culprit. ..."The wind was brought in to create jobs and to clear carbon emissions, but they've done neither," Winger said. "We're subsidizing a type of industry that can't make it on its own and replacing jobs with unsustainable work."
But Friedman said that the project "raises questions about the sufficiency and effectiveness of internal controls" at Western Area Power Authority. "In the event of a project failure, Western and ultimately the U.S. taxpayer could bear a large financial burden," he wrote.
"The MATL experience to date raises questions about the sufficiency and effectiveness of internal controls that Western had in place," the report stated. "The stalled wind power transmission project is clearly at risk with the outcome uncertain. In the event of a project failure, Western and ultimately the U.S. taxpayer could bear a large financial burden."
A Canadian energy company and an arm of the U.S. Energy Department are working on a deal to complete financing for a proposed Montana-Alberta power line that would span 214 miles and carry power from the region's emerging wind industry, officials said Tuesday.
Glacier County Commissioners Michael DesRosier and Ron Rides At The Door approved distributing $100,000 of NaturEner's $188,943 Wind Generation Impact Fee to the Glacier County Road Department for operations in FY 2008-09. The action came during the commissioners' session on Monday, Aug. 18. Chairman John Ray is on vacation and did not attend Monday's meeting nor did Clerk and Recorder Glenda Hall who is attending a conference this week.
Cascade County commissioners on Tuesday approved a tax break for United Material's Horseshoe Bend wind facility, the state's second largest wind farm located outside of Great Falls. Approval came over the objections of union heads, who said United shouldn't qualify for a tax break because it did not pay all of the workers on the wind farm project prevailing wages. United Materials countered that prevailing wages were offered for the vast majority of the work. ...Horseshoe Bend, which was completed in 2006, was the second commercial-scale wind facility completed in Montana, behind the 135-megawatt farm in Judith Gap. The approval of the tax break followed a public hearing on the tax break request. Three union representatives spoke against it.
Public Service Commissioner Brad Molnar kicked off his re-election campaign Tuesday in typically feisty fashion, saying he will be battling well-funded opponents who want to "silence" his voice against special interests. Molnar, a Laurel Republican representing the PSC's southeastern Montana district, said he has spent four years fighting - and sometimes losing - battles on behalf of consumers, voting against actions he says have raised electric and gas rates. ...When asked which "high-ranking politicians" he has exposed as raising utility rates and taxes, Molnar pointed to the federal tax credit for wind power producers. The credit could go to wind power developers in northern Montana that plan to sell power to Canada, thereby using federal tax credits to subsidize power consumed by Canadians, he said.
Montana's fledgling wind energy industry is keeping its fingers crossed that the House will approve legislation next week that would extend a tax break that has helped the industry compete financially with energy generated from fossil fuels. ...In the Senate, Republicans were able to block the legislation by one vote. President Bush threatened to veto it because it would have been paid for by canceling tax breaks that now go to oil and gas companies. Rehberg and the Republicans say the funding plan is a tax increase that would get passed on to consumers. Democrats say it better reflects the nation's shifting energy priorities and that the companies can well afford it. Exxon Mobil had a $41 billion profit last year, the largest ever posted by a U.S. company.
In a nutshell, if you have taxable income, it is reduced by $19 for every megawatt of wind electricity for every hour it is produced. For the top five wind farm owners listed above that comes to about $10 billion. Those $10 billion are not shifted to the deficit. They are shifted to regular taxpayers. Yup, even though none of the top five produce any electricity consumed in Montana, you still get to pay for it with your tax dollars. And what did you get for your tax dollars? Not much. By and large, nothing got built. Existing generation was bought, and the tax incentives were activated, making you a conscripted investor in their acquisition schemes and dreams. Guess that's another loophole Congressman Rehberg can work on with Sens. Tester and Baucus. Of course, that $10 billion is gone with the wind.
A panel chaired by U.S. Sen. Max Baucus on Tuesday approved an energy-tax package designed to boost alternative energy production and conservation - partially at the expense of big oil-and-gas producers. "This is a significant victory in our efforts to become more energy independent," said Baucus, D-Mont., who chairs the Senate Finance Committee. "We have more to do to address climate change, lower gas prices at the pump and wean America off of foreign sources of energy." The Finance Committee approved the $28.5 billion, 10-year tax package, which is expected to become part of a larger energy bill before the U.S. Senate this week. The package includes tax credits to encourage production of wind power, solar power, gas-electric hybrid cars, biodiesel fuel and "cellulosic" ethanol, which is produced from agricultural waste products.
LIVINGSTON - Some local governments in Montana are having second thoughts about entering the wind energy business despite the incentive of interest-free financing from the federal government. While some cities and counties remain enthusiastic about the idea, others are bailing out. Almost half remain uncommitted and the clock is ticking. The Park County Commission dropped out of the program this month, saying it involved too many unknowns. "It doesn't look like something we ought to hang our hat on right now," Commissioner Jim Durgan said. Similar sentiments reign in Carbon County.
Big property-tax breaks for developers that construct clean coal-fired power plants and transmission lines carrying "clean and green" energy were approved by Montana lawmakers on the final day of the special session. "This is a classic jobs and environment bill," said Evan Barrett, chief business officer in the governor's office of economic development.
Jan Falstad said that wind had gone from being "technologically challenged and too expensive - to being a popular and mandated goal." Perhaps more accurately, it should have read, "Wind has gone from being technically challenged and too expensive - to being technically challenged, mandated and taxpayer subsidized."
The Montana Legislature last week tabled an opportunity for the state's farmers and ranchers to profit from wind. By voting at the last minute to table Senate Bill 337, a bill that would have allowed Green Electricity Buying Cooperative to use $31.7 million in bonding authority to build 40 windmills on 40 farms across Montana, Montana legislators put on hold the wind company's plans to put together a bid for clean energy bonds and incorporate 40 ranches or farms involved in producing wind energy across the state.
A Senate panel controlled by Democrats voted Saturday to shelve Democratic Gov. Brian Schweitzer's proposal offering tax breaks to "clean and green" energy development in Montana. The Senate Taxation Committee voted 7-2 to table Senate Bill 562, advertised by the Schweitzer administration as its signature proposal this session on energy development. It wasn't clear Saturday whether or how the bill might be revived before a procedural deadline early next week. Evan Barrett, the governor's chief economic development officer, said late Saturday that there is broad public support for the idea and that he hopes the bill can be revived and moved through the Legislature. "The bill is on the table; it is not dead," he said. "It's not an easy path right now, but we think everyone will be able to work their way through it.