Wind Power in Howard County brings Road Improvements
by Amy Bouska, Board Chair, Howard County Energy District
As a result of a renewable electricity standard signed into law in 1983 by then-Governor Terry Branstad, wind turbines have been appearing in Iowa farm fields for decades. Opinions about the new “crop” vary widely: Are they a good thing because they help reduce carbon emissions and provide a new export “crop,” or are they a bad thing because they are eyesores (or “earsores”) and take parts of the fields out of production?
Lost from much of the discussion is what the turbines can do financially for the landowners and counties that host them.
Take Howard County, for example. Located in Iowa’s northern tier of counties, Howard County is where the hilly Driftless – which doesn’t have a financially viable large-scale wind resource – meets flat cropland: We are the northeast corner of Iowa’s windlands. The county has three major wind developments (with rumors that a fourth might be coming):
- Crane Creek, with 66 turbines rated at 99 megawatts, finished in 2009 and providing power to Wisconsin Public Service; [1]
- Pioneer Prairie (shared with Mitchell County), 182 wind turbines on-line in 2008/9 with a nameplate capacity of 300 megawatts and providing power to the TVA [2] [3]
- Saratoga Wind, on-line in 2019 with 33 turbines and a nameplate capacity of 66 megawatts and providing power to Madison (WI) Gas & Electric [4]
From a landowner’s perspective, the financial advantages of hosting a wind turbine are clear. According to ISU [5], the average 2022 annual rent for corn/soy ground in the county was $252 per acre, while annual wind lease payments exceed $5000 per turbine per year, each of which requires approximately one acre for the pad and access road. The leases are commonly for 30 years, at the end of which the land must be restored to its original condition [6]. As one landowner was heard to say, “It’s a no-brainer.”
Taxation of wind turbines under property tax laws in Iowa is complicated. Although all renewable energy generation equipment is exempt from property tax for five years, alternative arrangements that pay small but increasing amounts of property tax for seven years have been adopted in many counties, including caps on the taxable valuation. After the phase-in period, tax payments of $5 – 22,000 per turbine have been reported or publicly estimated by MidAmerican and Alliant [7]. Generally, approximately half of the revenue goes to the local schools with the remainder supporting other county functions, such as emergency services and road and bridge maintenance.
In the absence of other arrangements, the 145 Howard County wind turbines would currently be paying approximately $2.4 million in property tax. This compares to total FY 23 property tax income of approximately $6 million. However, the Board of Supervisors used tax increment financing (TIF) plus bond issuance to bring forward wind turbine property tax income of future years into current years, enabling the county to undertake an aggressive program of road and bridge repair. This has been well-received because, like much of Iowa, the county’s bridges are not in good condition: In 2020, the US DOT rated 65% of the 218 bridges as “fair” or “poor” [8]. Using the wind turbine funding, 33 bridges have been repaired or rebuilt to date (with two more scheduled soon), and 28 miles of roads have been resurfaced or re-graded.
“We just could not have done this without the income from the wind turbines,” said Pat Murray, a member of the Board of Supervisors. “They have made the roads and bridges safer for everyone. They have been a huge blessing for the county.”
[1] https://www.edf-re.com/project/crane-creek-wind/ (retrieved 22 Jan 23)
[2] https://www.edpr.com/north-america/pioneer-prairie-wind-farm (retrieved 22 Jan 23)
[3] https://en.wikipedia.org/wiki/Wind_power_in_Iowa (retrieved 22 Jan 23)
[4] https://www.mge.com/our-environment/green-power/wind-power/saratoga-wind-farm#:~:text=The%20Saratoga%20wind%20farm%20is,dioxide%20emissions%2040%25%20by%202030. (retrieved 22 Jan 23)
[5] https://www.extension.iastate.edu/agdm/wholefarm/html/c2-10card.html (retrieved 22 Jan 23)
[6] private conversation
[7] https://www.iaenvironment.org/blog/iowa-environmental-voice/wind-energy-generates-big-benefits-for-iowa-counties (retrieved 22 Jan 23)
[8] https://www.fhwa.dot.gov/bridge/nbi/no10/county20a.cfm#ia (retrieved 22 Jan 23)