Planning Commission reviews potential tax impact of windmills

By JIM TALBERT\Staff
TAZEWELL – A key question about the financial impact of windmills on the county’s finances was answered at the Dec. 10 meeting of the planning commission.
Supervisor Seth White, who also serves on the planning commission, distributed a letter from Dominion\BP Wind Energy outlaying how the windmills could be taxed. The letter was signed by Emil Avram, director of business development for Dominion and Jim Madden business developer for BP Wind Energy.
The letter summarized the company’s view of the state and county tax code as they applied to the asset valuation process and the applicable tax rates associated with the assets.
White said the company made some major assumptions because wind farms were new to the state and there was no precedent to go on. The letter stated the company planned to depreciate the windmills over a 25 year period and said the State Corporation Commission assesses electric generating equipment in January of each year.
The company used the example of a 60 megawatt Wind Farm that cost $120 million to build. They classified roads and buildings, substations and transmission lines and the foundations and towers as real property and estimated the value at $40 million.
The collection system, Nacelles and Blades and transportation\delivery costs would be classified tangible personal property and valued at $80 million.  They said the SCC’s tax division would ultimately decide the useful life of the personal property but 20-25 years was the most common for that type of equipment.
In the analysis the company used straight line depreciation with a ceiling of 90 percent of the initial fair market value and a floor of 25 percent. They attached a copy of the state code outlining how electric generating facilities are treated for tax purposes.
The code states “generating equipment reported to the commission by electric suppliers utilizing wind turbines may be taxed at a rate exceeding the real estate rate, but that does not exceed the general class of personal property tax rate applicable in the locality.’
Tazewell County currently taxes real property at $0.58 per $100 and personal property at $2 per $100. The county will undergo a reassessment in the coming year and the supervisors will have the chance to adjust the rate once that is complete.
[In other action the commission:]
*Approved a soil erosion and sediment control plan for Taylor Cattle Company.
*Approved a junkyard permit for John’s Auto Salvage.
*Heard from County engineer Gary Earp that a draft of a wind energy ordinance should be ready for the January meeting.
*Heard from White that the supervisors are negotiating with a consulting firm to assist with developing a zoning ordinance for the county.
*Heard from Chairman tom Childress that the Tourism Committee would work with the supervisors to select two key points in each district to place signs advertising tourist attractions. The committee will present recommendations for the design of the signs.
*Discussed a proposal to set up tourism zones in the county but took no action. Chairman Tom Childress said the tourism committee would discuss the idea.
*Agreed to hold the reorganizational meeting Jan. 7 at 6 p.m.
*Adjourned until Jan. 7 at 6 p.m.