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Paulding County was first in Ohio to establish alternative energy zone
Wednesday, January 30, 2013 6:38 PM

The following article was first published in the Paulding County Progress June 30, 2010.The county received its first PILOT payment on Jan. 29, 2013.

By DENISE GEBERS • Progress Staff Writer

Paulding County has become a front runner in Ohio in the race for green energy.

Last week, the Paulding County commissioners passed a resolution declaring Paulding County an alternative energy zone (AEZ), effective immediately.

They were the first in the state to do so.

Besides naming the county an AEZ, the legislation exempts taxes that would normally be levied against the assets of the alternative energy projects and requires Payment in Lieu of Taxes (PILOT).

The three-man board unanimously adopted the document June 21 to “...encourage the development of alternative energy generation facilities.”

Commissioners took their action closely on the heels of the passage of Senate Bill 232 on June 11. It was signed into law on June 17.

“We see this as the best option, with great potential for the county,” said Tony Zartman, chairman of the board of commissioners.

“This will allow the wind farms to start moving forward with construction, after they secure their permits from the state siting board,” noted Zartman.

Recognizing the fact that developers interested in locating wind turbines locally wish for “appropriate incentives to support” the projects, the board expressed its willingness to “...provide real and tangible personal property tax exemption ... provided the appropriate service payments are made.”

PILOT fees are determined by a formula set out in the state legislation. Critical to this formula is the number of Ohio residents who are employed during construction and the energy output of each turbine.

The PILOT fee will be distributed in the taxing district affected by the project the same way personal property tax would be. A second payment, called a service fee, would be paid directly to the county general fund. The total of these two payments will be $9,000 per nameplate megawatt capacity.

Current estimates put the PILOT fee at $7,000 and the service fee at $2,000 per megawatt.

Additionally with the passage of SB 232 and the approval of county commissioners, any revenue realized by the local school districts will not adversely affect the aid they receive from the state.

Taxing districts that could be affected by construction of wind farms include, in addition to the county, Antwerp and Wayne Trace local school districts plus Harrison, Benton, Latty and Blue Creek townships.

“All applications for the property tax exemption submitted by the state director of development according to (law) after the adoption of this resolution, and prior  to its appeal, are approved,” according to the document.

Currently, Horizon Wind Energy is proposing two construction phases with a possible third. A total 193 turbines is not out of the question for this company.

Iberdrola S.A. is looking at a similar process, but with fewer structures. The first phase would see less than 40 turbines in Paulding County. The second would all be in Van Wert.

Commissioners said these companies are investing about $4 million per turbine. The expected output of each structure is expected to range from 1.7 to 2.2 megawatts.

There has been great debate in the county, and the state, as to how tax money from these energy projects would be assessed and collected.

Up until now, talk had centered around various taxing districts passing enterprise zone agreements with the energy firms. Most of those proposals were more than what the energy companies were willing to pay because possible state taxes were so out of line with nearby states.

The Ohio Power Siting Board conducted public hearings in the area earlier this month. The first was June 8 in Convoy concerning 175 proposed wind turbines in Paulding and Van Wert counties for Heartland Wind LLC.

These structures are part of a wholly owned subsidiary of Iberdrola S.A.

A second was held in Paulding June 22 for the Paulding Wind Farm LLC. It proposes between 23 to 27 turbines in Paulding County. Horizon Wind Energy LLC is planning this project.

To qualify for the tax exemptions and PILOT, alternative energy projects must:

apply to the Power Siting Board by Dec. 31, 2011.

begin construction between Jan. 1, 2009 and Jan. 1, 2012.

Be in service by Jan. 1, 2013.

Although wind energy is the focus of community leaders in Paulding County at this juncture, SB 232 also addresses solar, nuclear, clean coal and cogeneration types of alternative energy sources.