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Environmental

Ohio Wind Energy Tax Incentives Deficient, Trade Group Says

Ohio is in a quandary as it tries to reconcile last year's greening legislation and aspirations for wind energy production with the state's financial troubles. The linchpin of the problem, of course, is tax revenue. The state is trying to find ways to close an anticipated $3 billion gap in the upcoming biennial budget. So, the Ohio Department of Taxation does not want to jeopardize over $620 million in tangible personal property (TPP) taxes it collects on electric utility equipment.


But the American Wind Energy Association (AWEA) casts TPP taxation as a disincentive to wind energy production in the state. The AWEA instead proposes a production tax on wind turbine-generated electricity. The state's 2008 energy bill mandates that renewable sources account for 12.5 percent of electricity sold in the state no later than 2025, and Ohio's TPP is driving potential wind energy producers away. Illinois, Indiana, Michigan, Pennsylvania, and West Virginia are all competing against Ohio in the wind energy production arena. But these states impose a lower TPP than Ohio, or none at all.


The AWEA maintains that a resolution to this problem could mean $6 billion to Ohio's economy, dollars that could be potentially generated by wind energy developers. This claim is hard to overlook. Governor Ted Strickland is challenging the AWEA to substantiate its assertions. But if wind energy production is a priority, the need for remedial action of some kind is intuitive. That said, Ohio is challenged by immediate and compelling fiscal problems, and the 2025 wind energy deadline is an abstraction by comparison.