The wind that steadily blows an open field of prairie grass in the Great Plains just as easily moves the blades of wind turbines. Buffalo Ridge, in the southwest corner of Minnesota, has benefited from the industry since the 1990s. The geography of the ridge creates a wind rich environment favorable to energy production and taxes from the industry provide revenue to the region.
Wind farms pay tax revenue to the communities that host them based on how much energy they produce. In some cases, the wind industry is the largest source of property tax to a county or township. However, there is not enough transmission infrastructure to support the amount of energy generated, causing grid congestion.
This energy traffic jam not only delays new development, but also shuts down operational turbines. In 2021, some townships in the Buffalo Ridge area saw a more than 50% reduction in wind energy production and associated tax revenue. More than $1 million in revenue was lost among three rural counties, and another $700,000 was lost among 15 more. Estimates from developers indicate 2022 production will be curtailed by about 50%.
To increase transmission capacity, the Midcontinent Independent System Operator (MISO) board unanimously approved a transmission expansion plan known as Tranche 1. The approval is a critical step in relieving grid congestion and enabling renewable energy expansion, but is it enough?
While Tranche 1 should help with grid congestion, the new capacity isn’t expected to come online until 2028. In the meantime, transmission capacity deficits are expected to widen.
There will not be enough capacity for 10.9 GW by 2027—the equivalent of 3,630 utility scale wind towers. The problem is primarily in MISO’s North/Central region, which includes Minnesota, Iowa, Wisconsin, Michigan, Manitoba, Indiana, Illinois, North Dakota, and part of South Dakota.
Meanwhile, rural communities home to the industry are losing out on tax revenue crucial to economic resiliency and already operational turbines are forced to sit idle.
The Center for Rural Affairs encourages MISO, regulators, and regional utilities to employ other tactics to immediately alleviate grid pressure closer to the wind production sites, such as repairing equipment failures and moving forward with complementary grid improvements.
Read about how rural counties in the Buffalo Ridge region have used their wind energy production tax revenue, in our report “Industry on the Prairie” at cfra.org/publications.
Feature photo: In 2020 and 2021, the historic courthouse in Jackson County, Minnesota, was refurbished with $2.5 million in wind revenue funds. This project included fixing and replacing the copper dome and statue on top of the building, roof work, and tuck pointing. | Photo by Molly Malone