Property Tax on Wind: What is Fair?

Certain municipal politicians have been complaining that wind turbines do not pay enough property tax. Of course, a municipality’s budget would benefit from more tax on any structure. But before we ask wind to pay more tax, we should compare it to the tax paid by other sources of generation. This entry will compare Bruce Power with wind.

The assessed value and taxes of the Bruce plant can be found here. The plant has an assessed value of $72 million, and pays property taxes of $1,743,000, which of course is split between the local government, the County, and Board of Education. $72 million is of course extremely low. Not only is the plant situated on prime Lake Huron shoreline, that if there was no plant, would probably worth $72 million undeveloped, but of course we have spent billions building the plant. The plant has about 4500 MW of operating reactors, and produced about 37,225,000 MWh in 2010.

What would be the tax on a similar capacity wind facility? Wind is assessed at $40,000 per MW of installed capacity, plus an acre of industrial zoned land per turbine. So if we use 2 MW wind turbines, we have 2,250 turbines X $15,000 industrial assessment/acre = $33,750,000 for the land, plus 4500 MW X $40,000/MW = $180,000,000 for the structures. So the assessed value of the same capacity of wind is $214 million. This much wind would produce about 12,000,000 MWh per year. The reason for this method of assessment on wind turbines can be found here.
This means that the property tax revenues for municipalities is three times greater per installed MW, and nine times greater per MWh produced than nuclear.

It a policy question whether we wish to burden electrical generating facilities with more property tax. If we decide to charge more tax, then of course, this has to be recovered in the electricity price paid. For Bruce County, as a major exporter of electricity, we would of course like electrical generation facilities to be taxed more, even if we have to pay higher electricity bills. The net gain to residents of Bruce County would be substantial. But what is very clear, is that wind already pays much more than other generation technologies.

If municipalities want more revenue from electricity generation, they should push for higher assessed values for all technologies. And in the case of Bruce County, they should embrace all technologies, especially the ones that pay higher taxes per kWh.

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