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Wind Farms Generate $879K in Tax Revenue for Brookings County; Who Needs Keystone?

Brookings County has $879,010 more to spend on roads, bridges, schools, and clean water this year, thanks to wind turbines. And that money comes largely from the nameplate tax, which specifically targets wind farms:

The term nameplate refers to an individual wind turbine, and its nameplate capacity is the amount of electrical energy it produces, such as 2 megawatts. The nameplate tax is based on a wind field's total nameplate capacity.

The nameplate tax is fixed by statute, and local beneficiaries receive 100 percent of that money. For example, in 2012, MinnDakota returned $162,000 in "nameplate" revenue, and Buffalo Ridge I and II generated $151,200 and $486,000, respectively. That's a total of nearly $800,000 that is shared by the county, Elkton and Deuel school districts, East Dakota Water Development District and the Richland, Lake Hendricks, Argo and Oaklake townships.

The gross receipt tax is shared by the state, the wind companies themselves and the local school and government entities. In the first five years, 10 percent of the gross receipt tax goes to the county to distribute locally, and 90 percent is rebated to the company.

But in years six through 10, the county's share jumps to 20 percent, and the state and wind companies split the rest on a 30-50 basis.

Years 11 and beyond, it's still 20 percent for the county, but the state gets the balance of the tax.

This year, that gross receipt tax added another $80,000 to the county's total wind revenues [Ken Curley, "Windmills Spin out Dollars for Schools, Townships," Brookings Register, 2012.06.01].

Beyond buying books and asphalt, those three wind farms also put ongoing income directly in the pockets of landowners:

Not included are the lease payments made to individual landowners for the placement of the towers. In South Dakota, lease payments are generally per turbine, and annual payments can range from $2,000 to $8,000 a year [Curley, 2012.06.01].

Now let's compare that to the benefits TransCanada's Keystone pipeline brings eastern South Dakota. The Canadian tar sands shipper bamboozled South Dakota with promises of property tax revenues that turned out to be inflated by a factor of three. In the ten East River counties through which TransCanada rammed Keystone, the average property tax uptick from the pipeline was 34% of Brookings County's wind farm take. Doug Wiken notes that counties along the Keystone pipeline can expect their tax revenues to decrease as the pipeline depreciates. Curley reports that Brookings County will see its wind farm tax revenues increase.

TransCanada doesn't offer ongoing leases; it seizes pipeline easements with the threat of eminent domain and remits one-time payments that equal about a dollar a day for the lifetime of the project.

The wind farms are humming along just fine under the nameplate tax. TransCanada has effectively lobbied our Legislature not to burden its pipelines with any specific per-barrel taxes that would allow us to share in the actual value of the project being shipped through our soil and water.

The wind farms also pose no threat to Brookings County of a budget-busting environmental disaster. The ten East River Counties through which Keystone currently carries hundreds of thousands of barrels of toxic, high-pressure tar sands oil each day could see their pipeline property tax bump wiped out in minutes by one crack in TransCanada's steel.

For South Dakota, wind power offers fewer costs and more benefits than foreign tar sands pipelines.

Related: Utility executives are losing confidence in the future of the coal industry.


  1. Frank James 2012.06.05

    Hopefully county governments will realize this and pressure the state government to change its priority toward wind and away from the bright and shiny pipelines. This is a SD resource we're capturing instead of just being part of a transportation hub for someone else resources.
    The state should take a firm stand to guarantee that any project, wind or pipeline is built only with the highest safeguards in place. However, I believe the returns from wind will be much greater for the state and that should be our focus.

  2. Kathy Tyler 2012.06.05

    The numbers are in, and windfarms are a windfall (:)) for South Dakota. But the wind farm companies have pulled out of northeast South Dakota. Land leasees and power line path leasees received notices of cancellation of contracts during the past two weeks. The cancellation of Big Stone II hurt wind farm development. Now wouldn't this be a good spot for economic development money?

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