CASPER, Wyo. — Duke Energy and Converse County can’t agree on the property tax value of the Top of the World wind farm in Converse County.
The energy company objected to the Wyoming Department of Revenue’s $414.7 million valuation of its wind farm for 2012 and appealed the Department of Revenue’s assessment. Duke says the value from its independent estimate is $225 million.
Last week, Converse County Commissioners filed an application with the Wyoming State Board of Equalization, requesting that the board allow Converse County to intervene in Duke Energy’s appeal of the value of the wind farm.
“For things that are not locally assessed — when the state does the assessment — if the two parties don’t agree, you go to the board,” Converse County Treasurer Joel Schell said. “It’s not surprising.”
Duke Energy wants the county to take the value from the nonstate estimate.
If Duke has its way, it would mean a $1.68 million reduction in revenue for the county from $2.89 million to $1.57 million. In July, Schell wrote a letter to Gov. Matt Mead, asking him to “provide assistance” in the Department of Revenue’s fight against the Fortune 250 company.
Schell wrote to Mead that “the proposed tax reduction would mean $255,000 less for the County General Fund, $41,000 less for the hospital, $23,000 less for the library and $1.23 million less for education” in Converse County.
The governor didn’t respond because “the state is acting as one on this,” said Renny MacKay, the governor’s spokesman.
“The Department of Revenue is in the executive branch of government and is appointed by Gov. Mead. ... The attorney general is defending the state, and the attorney general has no objection to the intervention,” he said.
In its permit application to the Industrial Siting Council, Duke Energy estimated it would pay $2.72 million in property taxes in 2012 and $13 million during the wind farm’s first five years in operation.
“If they (Duke Energy) win this appeal, they will have paid an average of $1.4 million per year and will be on a pace to pay $7 million over five years,” Schell wrote to Mead. “Duke has effectively cut their Wyoming tax burden in half. Keep in mind that they have also paid no production tax and that the project was exempt from Wyoming sales tax.”
The amount of energy that a wind farm produces was a factor in Duke Energy’s independent appraisal for the farm’s property value, said Tammi McGee, spokeswoman for Duke Energy.
She said the Top of the World farm “did not provide as much energy” as the Campbell Hill farm, so “the results lowered its fair market value.”
She said the independent appraiser also decreased the value of the property because of a $1-per-megawatt tax that begins in 2013 and its effects after three years of operation.
For construction of the wind farm, Duke Energy was eligible for a state renewable resource tax credit, said Ed Schmidt, director of Wyoming Department of Revenue.
The cost of the wind farm was $173.2 million. But Duke Energy did not pay full price for the wind farm’s equipment.
“A significant portion of that would have been exempt” from state tax because of the renewable resource credit, said Schmidt.
Duke Energy has four wind farms in Wyoming. Top of the World is the only property tax appraisal the company is appealing.