West Virginia wind subsidy targeted for elimination

In 2001, the West Virginia Legislature exercised its creative flair by determining that a wind power turbine should be considered a “pollution control facility.”

To accomplish this reach, lawmakers had to bastardize the existing legislative definition, which was aimed at equipment installed at power plants that would immediately reduce air or water pollution.

The sleight of legislative hand was important because it created a lucrative tax benefit for wind power.  The new law allowed wind farm equipment to be considered personal property and assessed at the “salvage” rate for tax purposes.

The scrap value is just five percent of the original cost, meaning the owners of the wind turbines get a significant tax break, while the state and counties where the wind turbines are located get shortchanged on property taxes.

It is estimated that the tax break this year will reduce funding for local schools, counties and cities by $8.1 million.

This year, the Legislature is trying yet again to right this wrong.  Senator Randy Smith (R-Tucker) is sponsoring a bill clarifying that wind turbines are for generation, not pollution control, and should be taxed as such.  Legislative efforts in previous years to erase the tax benefit have failed.

Even the federal government is moving away from tax breaks for wind generation.  Congress decided in 2015 to phase out the Renewable Energy Production Tax Credit over four years.  That credit can offset as much as 30 percent of the total cost.

Wind power is a growing alternative source in America, but not so much in West Virginia.  According to the American Wind Energy Association, wind accounts for less than two percent of the state’s energy production.  Compare that with Kansas, where nearly one-third of its energy generation comes from wind, or Iowa, where 37 percent of production is wind generated.

Yes, the wind blows over our mountain ridges, but not like it does on the plains.

West Virginia has a lot of challenges, but the production of energy isn’t one of them.  Massive supplies of natural gas and coal are cheap, reliable sources that easily meet all of the state’s energy needs with plenty to spare for exportation.

Frequently governments implement tax credits to help new industries get off the ground, but those tax breaks typically sunset.  West Virginia’s tortuous tax benefit for wind farms had no such end date written into the law, so lawmakers will have to do it on their own.

 

 

 

 





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