Michigan tax ruling could power wind energy projects

By Patrick Howard

Capital News Service

LANSING – 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.

Turbine blades next to the tower they'll be placed on. Photo: dave.worth (Flickr)

The State Tax Commission ruling allows energy companies to pay substantially less in personal property taxes and gives a break to state manufacturers as well. Companies that build wind turbine blades, “casts” – which house the turbines — and related parts now pay significantly less in property taxes as a result of the ruling.

In his State of the State address, Gov. Rick Snyder stressed how the reduction on taxes for industrial equipment will effectively boost the economy and create jobs.

Mark Clevey, manager of renewable energy programs at the Michigan Energy Office, called the tax ruling a positive for the future of state energy businesses.

Clevey noted that utility companies are now required to make 10 percent of the state’s energy renewable by 2015, so manufacturers are producing more renewable energy parts than the state has seen before.

“I see the renewable energy boom in Michigan as a combination of the relieved tax burden on companies and the popularity of green energy around the state,” Clevey said.

“The current administration acts under the presumption that tax reform will stimulate the entire economy. Whether or not this aspect alone results in an upward shift in the renewable energy market is yet to be seen,” he said.

Clevey said casting companies and turbine part manufacturers are beginning to locate to Michigan from overseas, a trend he described as a monumental change compared to three or four years ago.

Dan Bishop, the public information director at Consumers Energy, also stressed how the popularity of renewable energy, along with the 10 percent requirement, played a big role in heightened investment in wind energy.

Bishop said he is confident the tax break will encourage more Michigan manufacturing companies to diversify their products to meet energy company needs.

Bishop said the tax incentive for manufacturers bodes well for the future of renewable energy around the state.

“What we’ll certainly see is more wind farm projects being constructed. There is a high demand for turbines, and with a lessened tax burden, manufacturers will be able to produce more of the required parts at lowered costs,” Bishop said.

“I truly believe we are witnessing a wind revolution across the state,” he said.

There are several large-scale wind farms under development across the state, including projects in Huron and Mason counties, and one that Bishop said is still in the planning stages in the Upper Peninsula’s Delta County.

Consumers Energy’s $232 million, 56-turbine Mason County project, named Lake Winds Energy Park, began construction in Riverton and Summit townships in late 2011 and is scheduled to begin producing electricity around this time next year.

According to a fiscal analysis by Development Research Partners, a research and analysis firm, the Lake Winds project is expected to provide 150 jobs during peak construction, with eight to 12 full-time jobs once the park opens.

The report said construction will provide direct economic benefits in Mason County, with workers spending the money they earn at local businesses.

The report also indicated the county would receive $29 million in personal property tax revenue over 20 years. However, the recent tax ruling means that amount is likely to drop.

According to MoReno Taylor, legislative coordinator for Michigan Association of Counties, the dip in revenue could end up as low as $20 million, essentially costing Mason County $9 million in potential taxes that could be used for public services.

“Ultimately the agreements made between counties and companies should be honored,” Taylor said. “For counties, it really is an issue of money, so I think they expect companies to replace the lost revenue.”

Taylor said that counties, especially those with limited sources of revenue, generally invite such projects, regardless of how much is generated in taxes.

DTE Energy also plans to begin wind farm projects in Huron County, and Duke Energy and Exelon Corp. have expressed interest and attempted to initiate wind farm production around the state.

15 thoughts on “Michigan tax ruling could power wind energy projects

  1. Being a lifetime resident of Flint Mi and exploring the entire state mainly the thumb area I huge benefits with wind energy and manufacturing. Genesse County is pretty routed and set up for manufacturing and shipping. I would rather have companies come here make products AND produce clean energy than have OIL companies start fracking and ruining our water.

  2. Of course windmills are unsightly, and I do know people living near them who complain of the constant “whirring” and while I doubt there’s any health hazard (so far!), my interest is in whether there will ever be any cost benefit to consumers. If not, what’s the big deal! And if these enterprises are indeed being subsidized, what kind of sense does that make when economically our State, our Country are already suffering from the many “green” failures “subsidized” by the genius at the White House. It’s not so much the money, as it is the mentality. “Ooooh, it’s green technology – must be better than anything “old school.”

    Somebody previously criticized those resisting change, but I can mount the same argument in reverse: just become something is different doesn’t necessarily make it better!

  3. Pingback: Facing Up to the Folly of Windmills | Designs on the Truth

  4. If these windfarms can’t run on there own without Government subsidies and tax breaks from the State of Michigan then they should not be built here. They are one of the most expensive ways to produce energy and why should we pay more. I am tired of what is going on with the Housing values already being decreased by the economy and now we are letting these windmills help reduce the value or the potential buyers of our homes just so some can profit from windmills. I have my investment in my home and my rural setting it sits in and I would like it to stay rural without Industrial items peppered all around me.

  5. As a Michigan native and renewable energy developer I feel compelled to correct the following,wind projects do not cause health problems.from the NYT blog on January 18th,

    Wind Turbines and Health Hazards

    “There is no conclusive evidence so far that wind turbines are responsible for health problems ranging from balance problems to diabetes, an independent panel of health experts reports.”

    I think it safe to say that renewable energy related manufacturers wouldn’t be located in the state if it weren’t for a progressive regulatory climate. The utilities required to meet the10% standard are supportive of the measure and if you pay an electricity bill, you probably should be too.

    In economic analysis completed at San Diego State University, no relationship was discovered between housing values and proximity of a wind project. No study exists that illustrates a dilitorious effect of wind projects on housing prices. In the SDSU study a non-statistically significant positive correlation was reported.

    As for the benefits to Michigan, NRDC found that of $37 billion spent on energy in Michigan, $26 billion of that left the state. Seems like we’d be better off keeping it at home.

  6. Vehicles put out 5 times the amount of pollution that coal plants do.

    “No they don’t”

    An intelligent person would go to the Environmental Protection Agency – EPA website and learn.

    Ahh, but we will be all in favor of putting up useless windmills but we won’t stop driving our cars.

  7. So what is wrong with clean energy projects receiving some economic incentives? History is replete with dirty energy projects receiving immense tax breaks and subsidies. Consider the $20 Billion in subsidies and tax breaks and refunds that BIG OIL and GAS currently receive, even tho they are making more money in fuel revenue than they can count. Think about it, if even a few fossil fuel plants are replaced and no more are put on line, what a great thing that will be. Less emissions to foul our air, water and land, and less damage to our health and that of all other living things. We have fouled our nest, planet Earth, enough, time to start cleaning up in every way possible.

  8. If these things are so great why do they need corporate welfare handouts to survive?

    If these things are so great why didn’t they make other forms of generation obsolete decades ago?

    If these things are so great why haven’t the 100,000+ that exist worldwide ever shut down even a single coal plant?

  9. Pingback: Michigan tax ruling could power wind energy projects | All Kinds of Wind

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  11. Scott, Ashley,

    Let me put up a 500 ft. tall windmill within a quarter mile of your house and see how you like it. Holly said it best. Now my property value will decrease by 30% because no one will want to live next to a noisy wind turbine that casts flickering shadows on my house.

  12. To say wind turbines are ‘eyesores’ is not, in my mind, a good enough reason to eliminate them as a source of clean energy from an endless source. To say wind turbines are a ‘health risk’ is, in my mind, not proven beyond a shadow or a doubt, and is not a good reason to prevent them from being constructed in semi-residential areas. I believe very soon and as quickly as technologies change, wind turbines will be more efficient and require no subsidies to compete with other sources of energy. Some people can never resolve themselves to change, therefore create stress for themselves worrying about change. To progress is to change. No emissions, no smoke, no exhaust, no steam, no fallout all while creating the electricity we need to power our precious possessions, to me, seems like a win win.

  13. So now the nearby neighbors that have to put up with the wind towers and receive no benefits to get screwed twice. In his State of the State address, Governor Rick Snyder stressed how the reduction on taxes for industrial equipment will effectively boost the burden on the local governments and working poor to boost the profits for his 1% class to shelter in off shore tax shelters.

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