Green energy is golden for counties
WORTHINGTON — While opponents of industrial wind farms list many reasons why they don’t like wind turbines, supporters of the green energy projects can just as easily refute their claims.
Larkin Township farmer Gene Metz is an investor in Community Wind South and hosts a wind turbine on land he and his son, Mike, own in Summit Lake Township. They also farm around two other wind turbines.
Like many landowners, Metz signed on to host a turbine because of the financial benefit. Most developers want land leases of 20 to 30 years, with the option to extend it another 20 years. The most common arrangement has landowners receiving an annual payment in exchange for putting a turbine on their property. Contracts prohibit landowners from revealing how much they are paid.
Metz did say, however, that landowners with wind turbines share in nearly as much money as what the county collects each year in wind energy production tax.
“It gets to be a big deal,” Metz said, noting that more than $12 million in wind energy production tax was paid in 2018 in Minnesota. When you double that amount, knowing it’s going to landowners, it’s a huge economic benefit.
The wind energy generated by Community Wind South currently goes onto the grid, but a new Nobles Cooperative Electric substation near Lismore will soon be pulling from the grid to serve local homes, farms and businesses. That is exciting news for Metz, a Nobles County commissioner and member of the Minnesota Rural Energy Board.
“They’re keeping it local,” he said. “It’s not very often that transmission goes by a substation.”
Metz hears from people on both sides of the industrial wind energy debate. He’s heard claims that wind energy is a scam — at one time this was a common statement made by metro-area legislators because tax subsidies were needed to get the industry started. He also said the claim can be disproved just by looking at Pipestone and Lincoln counties, where companies are replacing old, worn-out turbines with new ones because they see the value in wind energy.
Metz said the tax credits won’t be around forever — perhaps ending within three to four years — and that’s why there’s a push to get more turbines up and operational now.
“A study by an independent company (shows) that wind without the subsidies is still the least cost of any other system that’s out there — even hydro,” Metz said.
As for claims that companies often sell out, Metz said developers do chose to sell. As a case in point, Xcel Energy is interested in buying out Juwi Wind’s Community Wind South project.
Having wind turbines within close proximity to his son’s home and also on land they farm, Metz also disputes some of the complaints raised about noise, shadow flicker and disruption in cell phone or TV reception. He said the sound of the turbines doesn’t bother him, but he understands not everyone agrees.
“What I’m finding from a lot of these noise studies is that no one has been able to prove it’s a health issue. It’s more of an annoyance,” he said. “If you don’t like something, you’re going to have health issues because you don’t like it.”
Metz uses GPS technology and wireless broadband and has never had reception disrupted by the turbines. The only thing he has learned is that some aerial sprayers will fly around the turbines and some won’t. Even the roads built to access the turbines have been a benefit to Metz, particularly last year when wet ground resulted in parking their grain trucks on the access roads.
The bottom line for Metz is that wind turbines have created a huge economic boom for counties in southwest Minnesota.Production tax funds needed equipment, improvements
Industrial wind energy is making a hefty financial impact on counties, townships and landowners who welcome the wind turbines.
In Rock County, where the annual levy is less than $6 million a year, the influx of cash from the wind energy production tax (WEPT) has been the equivalent of raising the levy 10 percent.
“We’re able to do some things with this wind energy production tax that we wouldn’t be able to do without it,” said Rock County Administrator Kyle Oldre.
While the WEPT funds have never been used for levy relief (counties still fear the state could change the tax formula and take away some of the WEPT revenue), Oldre said Rock County sets aside $150,000 of WEPT revenue each year for capital equipment — motor graders and trucks — and did a $4 million road improvement bond in which it pledged $400,000 of WEPT money per year to pay off the bond.
“It would have taken us years to do our roads,” Oldre added.
The WEPT revenues are now also paying off a $1 million bond the county used to expand broadband to every township.
“We’re the No. 1 county in Minnesota for fiber connectivity,” Oldre said. “Without that tax, it would have been very difficult to do.”
The formula for WEPT splits the money between the county and the townships where the towers are located. Counties get 80 percent of the revenues, with townships sharing in the remaining 20 percent. In Rock County, just three townships — Rose Dell, Denver and Springwater — are home to wind turbines and benefit from the tax revenue.
“Wind has been a very positive experience for the bulk of the taxpayers,” Oldre said. “When you’re doing the county’s budget and see the impact of these dollars, it’s been very favorable.”
In Nobles County, WEPT revenues have been used for one-time projects such as the $1 million grant to Lismore Telephone Cooperative to expand broadband throughout the county. There was also an appropriation made to the Nobles County Fair Association to construct a new concrete drive into the fairgrounds, and money is set aside for debt service on the Capital Improvement Project bond so as not to impact the county’s levy.
“And, we have each year deposited some into our operations also to reduce the levy,” said Nobles County Administrator Tom Johnson. “It’s kept the levy 1 percent to 1.5 percent lower than it would have been without utilizing those (WEPT) funds.”
Without the WEPT revenues, Johnson said the county would have likely continued deferring maintenance on its buildings.
“You can only defer things so long,” he added.
Rock and Nobles counties are not unlike other area counties when it comes to the use of WEPT revenues.
In Cottonwood County, the money has helped fund road and bridge equipment, road maintenance, infrastructure and to reduce the levy. Pipestone County has used its WEPT revenues to reduce the levy.
“From the years 2011 to 2017, State County Program Aid decreased significantly and required the use of wind production tax and reserve spending to keep the tax levy as low as possible,” said Pipestone County Administrator Steve Ewing. “In 2020 and beyond, we plan to use the wind production tax to pay back the costs we are spending in 2018 and 2019 for the demolition of the Central School building in Pipestone that was forfeited to the county for delinquent taxes.”
The demolition and related costs are estimated at more than $850,000, Ewing noted.
Jackson County, which collects the largest amount of wind energy production tax in the six-county area of southwest Minnesota, has used the money on building-related capital projects, with $350,000 dedicated to property tax relief each year.
Jackson County Coordinator Steven Duncan noted that WEPT revenues have helped finance construction of an addition to the Government Resource Center that houses Des Moines Valley Health and Human Services, paid for replacement of the carpet in the courthouse and fund debt service on a bond that helped finance the county’s public works facilities.
WEPT money has also been placed in reserves to help fund other projects, including the eventual replacement of the courthouse roof and HVAC-related air handling units on top of the courthouse roof.
“The wind energy production tax has been extremely important in helping to keep levy increases moderate and advance many of the capital needs of Jackson County,” Duncan said.
In Murray County, Auditor-Treasurer Heidi Winter said wind production tax revenues have been used for immediate property tax relief as well as current and future capital building projects.
“Since we started receiving wind production tax, we have been able to build a new human services building, complete numerous upgrades on our county fairgrounds and in our county parks as well as (complete) other small building projects — all without having to bond and borrow money,” Winter said.
Last year, Murray County commissioners voted to set aside $275,000 in WEPT to be used for future capital projects, and Winter said that’s something they plan to continue in the future.