Suburban districts may sweeten pot for downstate wind farms

A proposed wind farm in downstate Illinois would create local jobs at a time when they're badly needed.

The project would generate clean energy and help reduce Illinois' dependence on foreign oil.

And it would help three school districts from the Northwest suburbs offset their energy bills at a time when they have been hard hit by the state's inability to pay many of its bills.

But officials and residents in Stark County, a sparsely populated, agricultural county in north central Illinois where the school districts plan to build the farm, have one question: What's in it for us?

The answer to that question could have implications for other suburban school districts that are looking at the first-of-its-kind school wind farm as an experiment in how to dramatically reduce their energy costs.

In a July 21 column, Stark County News Editor Jim Nowlan wrote, “I think our county board should proceed cautiously before approving a special use permit to the group. The key question: What's in it for us?["]

It would seem an unusual question, given the county's recent history with the Camp Grove Wind Farm, a project that put up about 40 wind turbines in the county.

County officials estimate that Camp Grove, developed by Orion Energy of California, will bring about $500,000 annually in property taxes to various local government bodies, including schools. They tout the farm as a way to bring new income to farmers who lease their land for the turbines. The county even advertises the turbines as a tourist draw on its website.

In fact, the Camp Grove Wind Farm has turned out so well that Orion is looking to expand the project. It recently proposed an additional 30 to 40 turbines at the site, which stretches into neighboring Marshall County.

What's different about the wind farm proposed by Community Unit District 300, Keeneyville Elementary District 20 and Prospect Heights District 23?

The school districts' wind farm made possible by a 2010 bill crafted especially for schools looking to build wind farms would be operated by three nonprofit entities calling into question their tax-exempt status.

Stark County residents want to make sure the public nature of the proposed project does not mean they get next to nothing out of the deal.

“I don't really like seeing our county getting a reputation for being a place for people to deposit windmills ... without there being a tangible benefit for everyone in Stark County, not just some landowners who own land where the windmills are located,["] said Tom McMahill, a member of the Stark County Planning Commission.

McMahill's concern is understandable. The School District Intergovernmental Cooperation Renewable Energy Act, signed by Gov. Pat Quinn in late June, specifically exempts consortiums of public schools from taxes.

According to the act, “that part of an eligible project owned by (a consortium of public schools) shall be exempt from property taxes["] and that consortium “shall not be subject to any taxes of the state of Illinois based on or measured by income or receipts or revenue.["]

State Rep. Fred Crespo, a driving force behind the legislation, said the intent of the act is to allow school districts to produce only enough electricity to offset the energy needs of their buildings and facilities.

“They'll be treated as a not-for-profit, and not-for-profits are exempt from certain taxes,["] Crespo said.

Crespo's bill sailed through the General Assembly, garnering just a single “no["] vote in the House. But it may not be the final word on school wind farms especially as lawmakers downstate realize the law could end up depriving their districts of hundreds of thousands of dollars in annual property tax revenue.

State Rep. Donald Moffitt, a Galesburg-area Republican whose district includes Stark County, said he would consider introducing new legislation that would require suburban schools to compensate local taxing bodies when they build wind farms downstate.

“I think we need to have lots of discussion on that with input from all interested parties,["] Moffitt said. “It's something that needs to be on the radar screen.["]

The suburban school districts that are eyeing Stark County for a 13-turbine, 19.5-megawatt wind farm are not waiting for legislation. The financial model they have proposed, which relies upon a large federal grant and private investment, would be structured in such a way that the revenue produced by the wind farm would be taxable, officials in the districts say.

“Due to the available grants that we need in order to make it financially feasible, we do have to be a taxable organization,["] said Dave Ulm, supervisor of facilities and energy management for District 300. “Because the private investor is going to have a stake, (the consortium) can't be nonprofit.["]

But Gary Ofisher, director of operations for District 20, said it is not clear right now what the financial model will look like because the consortium has not yet received proposals from turbine manufacturers and potential investors.

“There are so many variations on this (financial) model,["] Ofisher said. “Until we get something formally from a developer or a vendor, it's hard to speak on behalf of them.["]

Ofisher said school officials have also discussed making payments to Stark County government bodies in lieu of property taxes or inviting a Stark County school district to join the consortium and share the benefits of the wind farm.

But even if the school districts ultimately offer Stark County nothing, some downstate officials say that under the law there's not much they can do about it.

“While I clearly want there to be a direct benefit to the county, I don't think it's the county's place to make that decision,["] said Mike Bigger, president of the Stark County Board. “That would leave the county open to litigation ... and that's what we want to avoid.["]