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Clean Energy

Wind Energy Production Tax brings $48 million to Minnesota

barn with wind turbinesOver the past ten years you may have noticed more wind turbines on the horizon as you drive to the grocery store or pick up the kids from school. That’s because wind development has grown into a significant industry, especially in southwestern Minnesota. In fact, revenue from the Wind Energy Production Tax this year was already ten times higher than only ten years earlier.

Over that same period, more than $48 million has been paid to counties, townships, and schools in Minnesota. And the impact has not been lost on local officials. “It’s been a boon to the county,” Mower County Coordinator Craig Oscarson said. In the past, Oscarson said the wind energy production tax has been as much as 10 percent of all revenue for Mower County.

In Worthington area, the Wind Energy Production Tax has added nearly $28 million to local revenues. “Any chance we have to add additional income into our community will be welcome. And that amount is substantial,” said Abraham Algadi, head of the Worthington Regional Economic Development Corporation. “There’s an incredible opportunity for job creation not just in research and development, but also in manufacturing, installation, and maintenance.”

Many of the workers filling those new jobs are being trained at the Minnesota West Community and Technical College in Canby. Canby offers an online certificate, a one-year diploma, and a two-year diploma and works with local energy companies to provide hands-on experience for students in each program. Tim Hansen, an instructor at Minnesota West, says demand for jobs in the industry has never been higher, “Just this morning I got an email asking me for employees. I have more job openings coming across my desk than I have students to fill them.”

New wind development has brought significant revenue into area communities, helped create new jobs, and increasingly has downward pressure on energy prices. In his remarks this past fall at the Minnesota Utility Investors annual meeting, Xcel Energy CEO Ben Fowke said “Xcel has brought wind online with prices better then natural gas… wind has been pragmatic, cost-effective”

In fact, Iowa has developed much more wind than Minnesota (5,176 megawatts compared to 3,035 megawatts in Minnesota according to the American Wind Energy Association) and on average customers  there pay nearly 20 percent less on their electric bills (7.64 cents/kilowatt hour vs 9.41 cents/kilowatt hour according to the US Energy Information Association.) By contrast, Wisconsin produces just a few hundred megawatts of wind energy and has electricity rates 11 percent higher than Minnesota.

This year is likely to include several key milestones for the Wind Energy Production Tax. Not only will total payments to local units eclipse $50 million, but payments in 2015 alone will exceed $10 million for the first time. Hansen believes this growth is promising for the industry, but also for this particular region. “Wind energy is a great asset for our state, specifically in southwestern Minnesota,” Hansen explained. “And the potential for growth in the wind industry is huge.”

Wind development has grown into a significant industry, especially in southwestern Minnesota. In fact, revenue from the Wind Energy Production Tax this year was already ten times higher than only ten years earlier.

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