Tax debate may stall $300 million Siouxland wind farm – Sioux City Journal

May 21, 2013 by  
Filed under Green Energy News

LINCOLN | Nebraska Gov. Dave Heineman has reiterated his opposition to tax breaks that could pave the way for a $300 million wind farm in Dixon County.

A bill by Omaha Sen. Steve Lathrop would remove a barrier to the development and export of wind energy in Nebraska. But Heineman said he’s against Lathrop’s measure because the Legislature is preparing to study how best to overhaul Nebraska’s tax system.

“I’ve made it very clear that Nebraskans deserve tax relief first … before you ought to be considering a bill like that, and especially providing special tax breaks for a Kansas company so they can ship Nebraska energy” out of state, Heineman said. “You ought to ask him why that makes sense.”

If Lathrop’s bill is passed, Dixon County could gain a 200-megawatt wind farm. TradeWind Energy’s Rattlesnake Creek Wind project is proposed for more than 10,000 acres of farmland between Allen, Emerson and Wakefield. More than 100 local landowners would receive lease payments of $10,000 to $15,000 per turbine, Lathrop said.

Lenexa, Kan.-based TradeWind Energy has said it is ready to build the $300 million to $400 million project, which would create 200 construction jobs and 12 to 16 permanent jobs, and pay $700,000 a year in local taxes. TradeWind officials have said attracting customers is difficult because the state’s lack of tax incentives means it would have to charge more for power than companies based in other states.

“I can tell you that until there is some movement in Nebraska, we’re going to have a more difficult time in marketing power from Rattlesnake Creek,” said Frank Costanza, executive vice president of business development for TradeWind, in December. Without customers committed to buying the power, he said, the project won’t get built.

Lathrop’s bill in the Nebraska Unicameral would provide a sales tax exemption for the purchase of turbines, towers and other wind-farm components — which Iowa, Kansas and Oklahoma have used to create a wind-energy boom. Meanwhile, Nebraska has lagged behind, ranking 26th of the 39 states that generate wind energy, despite having the fourth-best wind resources in the country.

With the bill, it was expected that in the next two-year budget, tax refunds in Nebraska could equal about $7.5 million.

Proponents of the legislation said the state needs to act now if it wants to develop its abundant wind resources, because a major wind-energy incentive β€” a federal production tax credit β€” is scheduled to expire at the end of the year.

The bill earlier advanced to second-round of debate on a 30-0 vote. Lawmakers are expected to take it up again this week.

The Dixon County project would fall under the Nebraska Advantage Act, which was passed in 2005 and is meant to encourage companies to expand and create jobs by offering them tax incentives.

To date, some 320 companies have applied for Nebraska Advantage credits and created 20,500 new jobs.

Lathrop noted that Heineman has been a major proponent of the Advantage Act.

“It is like so many additions to the Advantage Act … which is all about economic development,” Lathrop said. “Most of the Advantage Act … is intended to incent outside businesses to come to Nebraska. So it’s doing exactly what we’ve done a million times, and I think he’s probably supported every one of them.”

Nebraska lags in the production of wind energy. Iowa, for example, generates more than 13 times as much wind power as Nebraska β€” 4,536 megawatts to 337.

MidAmerican Energy, which has nearly 1,300 wind turbines in Iowa, including several farms in western Iowa, recently announced plans to spend $1.9 billion to build another 656 wind turbines across the state. It’s the largest economic development project in the state’s history.

Journal Business Editor Dave Dreeszen contributed to this story.

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