Subsidiaries of NextEra Energy Resources L.L.C. have filed 112 new petitions against Tuscola County and several townships, once again contesting millions in taxes paid and forcing local jurisdictions to sit on revenue from wind turbines.
Tuscola Bay Wind L.L.C. and Tuscola Wind II L.L.C. filed the petitions with the Michigan Tax Tribunal against Tuscola County and Gilford, Akron, and Fairgrove townships at the end of May. The state court verified the petitions July 19.
For the third year in a row, the two subsidiaries of Juno Beach, Florida-based NextEra Energy Resources L.L.C. claim the taxable value of their wind turbines in Tuscola County have been improperly assessed.
Because of that, the petitions claim the NextEra Energy Resources subsidiaries paid too much in taxes and they are due a refund.
With the Michigan Tax Tribunal yet to rule on the original petitions filed by NextEra companies in 2014 and 2015, any government body being challenged by NextEra has had to put money away in case they need to pay it back – instead of putting it to use on everything from services for veterans to road improvements.
That includes Tuscola County, which has put about $1.5 million in escrow already.
“I’m not happy that they are making us go through this aggravation, but I did expect it to happen,” said James Stockmeyer, supervisor, Gilford Township. “I knew once a company started dealing with the township that there was a possibility they were just promising things…big companies always make promises they usually don’t keep.”
Tuscola Bay Wind and Tuscola Wind II are the subsidiary companies formed by NextEra Energy Resources for its two existing wind developments in Tuscola County. NextEra Energy Resources – a subsidiary of NextEra Energy, which is worth an estimated $60 billion – plans to build a third “wind farm” in Almer, Ellington, and Fairgrove townships.
Bryan Garner, manager of communications at NextEra Energy Resources, said the company wants only to pay its “fair share” of taxes.
“There is a disagreement between the local municipalities and the state of Michigan about the method to be used for turbine valuation, and our company is caught in the middle,” Garner told The Advertiser. “We understood that the taxable value would be one number based on the state’s guidelines, but when we received our tax bill, it was a much higher number.
“We appealed to the Michigan Tax Tribunal to help resolve this issue. This is a process that is common in most states to resolve tax assessment issues and arrive at a fair market value. In the meantime, we have paid the full amount of the taxes that are the subject of the disagreement.”
Garner also said that regardless of the Michigan Tax Tribunal ruling, wind turbine projects have an economic benefit to local communities. The company has placed billboards throughout the Thumb region to support its messaging.
Hoagland also said that the wind turbines provide economic benefit, despite the tax dispute, which he said makes the situation “bittersweet.” Wind turbines in Tuscola County resulted in about $2 million for the county’s general fund alone in 2015.
“From the standpoint of is there anything else happening economically out there, are we seeing new growth, and development to sustain services? No,” Hoagland said. “But please do not put me in the position of not understanding the frustration on the part of the public.
“We’re frustrated with the wind companies also,” Hoagland said. “What they told us, and what we’re receiving, and what they did are two different things. Completely different.”
The topic of local wind tax revenue being held up has been discussed in recent public meetings.
This past Monday, Hoagland presented the amount in escrow by Tuscola County – through its general fund and nine special millages – to the Tuscola County Board of Commissioners at its committee of the whole meeting.
Hoagland later said a total of about $1.5 million is expected to be in escrow by the end of 2016.
That’s money, he said, that could be put to use in various ways, from funding services for veterans and senior citizens to the Tuscola County Sheriff’s Office and road improvements.
The subject of escrowed tax revenue also came up in the July 18 Fairgrove Township meeting.
“We have been able to build up some fairly sizable reserves here,” said Keith Aeder, supervisor, Fairgrove Township, during a discussion about township finances. “But a lot of those funds are being reserved by design until we find out what the tax tribunal decision is going to be on the wind turbines.
“We could very well be asked to return a whole bunch of money and we don’t want to be in a position of having spent that money,” Aeder said.
The 112 new petitions filed by NextEra subsidiaries are similar to those filed in late May by Consumers Energy Co. contesting the value of turbines within its Cross Winds Energy Park in Akron and Columbia townships. (A petition must be filed for each parcel in question because of the way counties track property).
NextEra also filed similar petitions for its existing Tuscola County properties in 2015 and 2014.
The Michigan Tax Tribunal is expected to hear the case for those years later this year.
“We have made an appeal for tax year 2016 as well so the Tribunal can resolve the difference between state and local assessments impacting all three years,” Garner said.
Tuscola County is part of The Michigan Renewable Energy Collaborative (MREC), an organization of counties that banded together to fight the legal battles with regard to wind-related projects.
As of press time, attorneys for MREC had not filed responses to the petitions.
Andrew Dietderich is editor of The Advertiser and can be reached at [email protected]