In this Oct. 29, 2011, file photo, turbines spin as the sun rises at a wind farm near Toronto. North Dakota is expected to add hundreds of mega-watts of wind energy in 2012, while development has slowed to a near stop in South Dakota. Nevertheless, wind turbines in Brookings County brought schools and townships nearly $900,000 in tax revenue this year. Dirk Lammers/AP
• County shares in $879,000 ‘wind bonus’
BROOKINGS – “It’s an ill wind that blows nobody any good.”
The winds in Brookings County are blowing dollar bills these days – something the area’s pioneer settlers couldn’t have dreamed of when they first put up windmills to help pump their water wells.
This year the county’s three wind farms – MinnDakota and Buffalo Ridge I and II – returned almost $900,000 to various county entities, Finance Officer Vicki Buseth told the Brookings County Commission recently.
The wind turbines scattered across the county’s eastern landscape were responsible for more than $319,000 in new revenue for the county government itself, and another $560,000 went to townships and school and water districts – a grand total of $879,010.
The good news is that if the wind keeps on blowing, that’s the least amount of revenue the county will ever receive from its giant turbines. The annual payment should grow slightly in future years.
Buseth presented the 2012 tax distribution numbers at a commission session earlier this spring. The State of South Dakota receives the wind farm revenues in April of each year, and the funds are distributed to the various entities in May.
“The state wind farm tax consists of two taxes that combine to give us the total dollars received from the wind farms,” Buseth told the commissioners. “They are the nameplate tax and the gross receipt tax.”
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.
Besides the Brookings County Commission, the biggest beneficiaries of the windmills are the Elkton and Deubrook school districts. The Elkton schools’ share of the combined wind taxes amounted to $132,650 this year, while Deubrook collected a whopping $387,406.
This is the fourth year Brookings County has collected revenues from its wind towers. In 2009, when only the MinnDakota farm was in operation, the county shared $180,000. That jumped to almost $300,000 in 2010 when Buffalo Ridge I came on line, and increased to nearly $348,000 last year when the third installation was completed.
Buseth said the much larger revenue share this year resulted from the third wind farm’s production. Buffalo Ridge II ran for only a day in its first year, but the 2012 tax distribution reflects revenues for an entire year of operations. Buffalo Ridge II returned nearly $531,000 in the 2012 revenues distributed this month versus only $1,400 in 2011.
“The numbers will be pretty consistent from this point forward,” Buseth said.
The revenues shown in the accompanying chart combine both the nameplate and gross receipt taxes.
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.
Other economic benefits of the wind fields are the jobs and construction spending the projects bring to host regions.
Contact Ken Curley at kcurley@-brookingsregister.com.