Credit: Michael Janke

Minnesota’s wind energy tax is helping rural counties hold the line on levy increases and pay for road repairs and other infrastructure projects.

Revenue from the state’s wind energy tax has increased more than fivefold over the past decade to $12.7 million in 2018, according to Minnesota Department of Commerce. Wind farms larger than 12 MW pay $1.20 per MWh, while smaller farms pay just 36 cents per MWh.

“Wind revenue is now a key source of income for many counties, relieving the property tax burden on homeowners and businesses,” said Commerce Commissioner Jessica Looman.

The revenue is especially important because wind developments tend to be sited in counties with lower than average income. The five leading Minnesota counties for wind revenue have median family incomes more than $10,000 below the state average of $57,000.

“In some of these rural counties, wind revenues represent 20 percent of their annual operating budgets,” said Isak Kvam, a communications and policy associate with the pro-wind advocacy group Wind on the Wires. “It’s not often that these communities have a multi-million business knocking on their doors.”

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Wind on the Wires and others want to counter pockets of anti-wind sentiment by highlighting the tax and other benefits from wind farm projects, including job creation. “I don’t think those benefits have been told enough,” Kvam said.

The boon is hardly confined to Minnesota or the Midwest. A Moody’s Investment Service report released earlier this year found 400 counties around the country receive tax revenues.  

Not all counties benefit equally. While 24 counties in Minnesota will receive some wind tax revenue this year, more than half will go to just five of them: Murray, Mower, Nobles, Jackson and Lincoln. State law instructs counties to share the wealth, with 20 percent going to townships.

In the southwest Minnesota, Jackson County is using wind revenue to pay its portion of a $14 million shared public works facility with the city of Jackson. The county is one of two expected to receive more than $2.2 million this year.

“It’s been good for us,” Jackson County Commissioner Don Wachal said.

All together, wind revenue represents about a fifth of Jackson County’s annual budget. Next, the county is county is considering using the money to upgrade equipment for heating and cooling its complex of civic buildings, Wachal said.

Jackson County Commissioner James Eigenberg said his first budget process taught him “it would be a tough go” without the wind money. He thinks taxpayers are more aware of that, too, even if they are not fans of turbines.

Nearby Mower County uses $400,000 annually from its wind tax money for road repairs. It’s a small amount compared to the more than $8 million it spends each year on its 404 miles of roads, but it’s money that doesn’t have to come from property taxpayers.

“Our roads are just going to pot,” Mower County Commissioner Tim Gabrielson said. “We’d like to use more of that money to rebuild our infrastructure now because it will be cheaper for the county to do it now in the long run.”

Mower County Administrator Craig Oscarson said the levy would have to increase up to 9 percent if wind revenue went away.

Beyond tax revenue, charitable giving provides another boost to some wind generating counties. Geronimo Energy creates a local nonprofit foundation in the communities where it builds projects. Local residents serve on the board and distribute money to local charities, schools and government agencies.

Geronimo contributes $200 per installed megawatt to the local foundations for 20 years. Budgets range from $20,000 to $80,000 annually, Geronimo Energy spokeswoman Lindsay Smith said. The foundations have paid for fire departments, schools, archery groups, new community halls, and bonding project payments.

“I know other wind companies give here and there, but Geronimo is unique doing this kind of structure,” Smith said. “People are excited, grateful and appreciative. These communities look forward to giving back, and we do, too.”

Correction: A southwestern Minnesota community used wind production tax revenue to install a fiber optic network. An earlier version of this story misstated the source of funding for that project. 

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.