When the tax bill came due this year, the North Carolina-based energy giant went back on its promise — in the words of local officials — and filed appeals of the state’s property tax assessments on all four of its wind energy projects in Wyoming: Silver Sage and Happy Jack in Laramie County and Campbell Hill and Top of the World in Converse County.

Reported by Staff

What has Converse County officials up in arms is the fact that the state’s tax assessment was almost identical to Duke’s own estimates, which were presented in testimony to the Wyoming Industrial Siting Council leading up to the construction of its wind projects. At that time, the County indicated it expected to receive $2.8 million in property taxes per year and $13 million over the next five years and the state’s calculation agreed.

Duke Energy now says it owes about half  as much as it previously estimated, according to documents it submitted to the State Board of Equalization.

“We’re saying, you told us that was your best estimate. Are you just stupid, or are you trying to mislead us?” said Converse County Commission Chairman Ed Werner. “Duke has been one of the best companies we’ve worked with on the ground. But from a corporate tax structure level, they threw us a curve ball.”

The company rejects that characterization. Said Greg Efthimiou, a spokesman for Duke Energy: “We were asked to provide an estimate, and that’s what we did,” Efthimiou said. “The reason that we are appealing the property tax assessment is due to the methodology for calculating that tax assessment.”

John Schiffer, R-Kaycee, is co-chairman of Legislature’s Joint Revenue Interim Committee and he believes Duke may have knowingly supplied false information under oath in its past testimony to the Industrial Siting Council. “Now it appears the people who testified for Duke Energy were not straightforward with their testimony, and I object to that,” Schiffer said.

Dan Neal, executive director of the Equality State Policy Center, said he believes counties may launch a protest and ask the council to reopen a permit and examine whether it should be revoked based on false materials or statements.

Duke’s position is that it provided the best information available at the time, and that the state failed to remove intangible costs in its property tax assessement, which can include long-term contracts for the delivery of power. It also contends the assessment not not recognize all forms of depreciation.

“Duke Energy, like any other wind developer, is obligated to pay its fair share of property tax. And we intend to so,” Efthimiou said.

The legal dispute means roughly half the $41.7 million owed to Laramie and Converse counties in property taxes — according to the state — remains in escrow, with millions of dollars earmarked for public services, including hospital districts, being held up. As one county official pointed out, these are services directly impacted by the construction and ongoing operation of those wind energy facilities.

The Duke Energy case is being watched closely because its outcome could influence future wind projects in Wyoming. At least seven developments have been constructed in recent years, with plans for several more. If the energy company’s tax estimate of approximately half of what the state says is owed proves correct, that puts into question the county, and perhaps the state’s, economic model for wind development

As we’ve reported in Wyoming Energy News, state lawmakers are studying a tax structure for the wind energy industry. The Legislature recently passed a $1-per-megawatt-hour generation tax on wind energy. The outcome of the Duke Energy case could change entire tax landscape for the industry before that law goes into effect in 2012.

Read more about the subject in Dustin Bleizeffer’s report in the Casper Star Tribune.