Ed Gebert/Times Bulletin Iberdrola Renewables’ Dan Litchfield gestures toward his company’s three-volume application to the state’s Power Siting Board. Iberdrola Renewables has been seeking tax relief to be able to put up a wind farm in Van Wert and Paulding counties.
Ed Gebert/Times Bulletin
Iberdrola Renewables’ Dan Litchfield gestures toward his company’s three-volume application to the state’s Power Siting Board. Iberdrola Renewables has been seeking tax relief to be able to put up a wind farm in Van Wert and Paulding counties.
BY ED GEBERT

Times Bulletin News Writer

egebert@timesbulletin.com

The question of whether or not there will be a number of wind turbines dotting the landscape of Van Wert and Paulding counties may come down to a familiar issue - taxes.

According to Dan Litchfield of Iberdrola Renewables, one of a handful of companies vying for local land rights for turbines, the tax rates could end up preventing the construction of Blue Creek Wind Farm. That project was to use approximately 160 turbines, 120 of those in Van Wert County.

So Litchfield has been out searching for tax relief. "It's not that we're seeking special treatment, we just want to see a rate that is competitive with other states. Otherwise we're going to have to invest in other states," he stated. "That's not meant to be a threat. Personal property taxes are so high in Ohio, it is a significant hit to our operating expenses, and it would nearly cause us to look elsewhere."

A series of meetings with school boards, and township and county officials have not yet alleviated the issue, although Litchfield noted that he has not received a complete rejection from any group he has visited.

"As far as the wind farm, the reaction has been very good. But now the issue of taxes has come up and that's been mixed," Litchfield admitted.

In the past, personal property tax rates in Ohio have caused more than one potential employer to think twice about the Buckeye State. Trying to compensate for those taxes by using abatements locally to level the playing field is an option for companies like Iberdrola Renewables.

Litchfield points to Minnesota as an ideal tax situation. That state already has 1,800 megawatts of wind power installed, plus a new wind turbine factory, and is headquarters for two top wind energy construction contractors. But he realizes that some early proposals were too hard to swallow.

"I think some of the earlier numbers I floated like the 95 percent abatement were too aggressive. That's off the table," he confirmed. "However, that wasn't just pulled out of thin air. That's based on what the law is in Minnesota."

Instead of getting local tax relief, green energy firms like Iberdrola could benefit from a change in the law, if such a change can make it through the Ohio Legislature and get the signature of Gov. Ted Strickland.

One of the proposals, Senate Bill 232, would replace property taxes with a flat fee amounting to around $12,000 per wind turbine. That money would be divided among local taxing bodies according to the current rates.

The trade-off from the wind company would be an agreement to repair roads damaged by construction and to train and equip emergency responders. Litchfield pointed out that his company was already going to do both.

"We're very much in favor of that bill because it would make taxes in Ohio competitive with neighboring states," summarized Litchfield.

Another potential problem has already been worked out for Iberdrola. According to Litchfield, the Ohio Ethics Commission has advised that there is no conflict of interest danger in having contracts with township trustees or school board members since all landowners are paid at the same rate.

Until the tax situation is adequately addressed, the possibility of a wind farm remains on the back burner. If the taxes are changed, either at the state level or locally, and the state approves the application, then the turbines could start appearing by 2011.

Litchfield is confident that the issue will be resolved. "Either way we should be able to come to a reasonable solution," he predicted.