Uneven Local Benefits of Renewable Energy in the U.S. West: Property Tax Policy Effects

This paper estimates the amount and relative importance of new property tax revenue associated with renewable energy facilities in 17 rural counties in the contiguous, continental U.S. West. Most of study counties are areas with limited economic opportunities that stand to benefit from new utility infrastructure and also feature high quality renewable energy resources and/or potential for future new high voltage transmission development. The companion piece to this article titled, “County Economic Development at a Glance: A Single Measure of Opportunity,” describes and maps a county-level index of economic opportunity. Our study addresses the fact that although substantial effort has been spent on refining approaches to economic impact analysis for the benefit of promoting renewable energy development (see Reategui and Hendrickson, 2011), few (if any) studies have tackled the question of how benefits vary from place to place as a function of tax policies. The reality is that fiscal benefits to rural communities associated with new utility infrastructure are uneven. This paper provides revenue estimates and policy analysis to explain how and why revenue impacts vary across the rural West. We hope this work will inform project developers, policymakers, and local and state officials and will encourage discussion of policy approaches that prioritize local economic benefits in attracting and supporting new electricity infrastructure. This paper begins with brief discussion of how this study links to published research and an outline of our methods. Next, we offer the findings of potential size and scale of new property tax revenue in the study counties. What follows is a discussion of the uneven revenue benefits from new renewable energy infrastructure and possibilities for policy reform and future analysis. For the purpose of keeping the discussion clear and concise, major methodological considerations are presented in an accompanying appendix.