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Action Alert: Support Small Renewable Energy in SB 58

January 25, 2010

Contact your legislators about SDRC’s key bill of concern:

SB 58—Promoting Renewable Energy Development in South Dakota.

Here are some talking points to use with your legislators.

Senate Bill 58 will help in the distributed-scale renewable energy (RE)
projects that generate electricity, which would include projects as small as
homeowner-installed solar panels in the range of tens of kilowatts to wind
turbines located on farms in projects generating up to 5 megawatts. The
bill does so by exempting the assessed value of the RE installation from
real property taxes, up to a maximum of fifty thousand dollars of the
assessed value.

Distributed-scale RE projects are good economic development for two main
reasons.

First, they provide jobs, both in initial construction and, over the longer
term, in maintenance. These are the kind of jobs that are likeliest to
generate sustained South Dakota income, unlike manufacturing jobs that can
be off-shored or moved to another state.

Second, generating projects on this scale help keep the price of electricity
reasonable for electric customers. They do this by using fuel that is
either free, as in the case of wind and solar, or low cost, as in the case
of waste materials. But, above all, they produce electricity that is
cheaper to retail customers than electricity from either new conventional
sources or bigger-scale renewable energy sources because their production is
easier to use closer to the point of generation. They can produce for
injection to local distribution grids, bypassing the expense of new
high-voltage transmission which is turning out to be critical for using
electricity produced in large centralized projects of a higher megawatt
scale.

We should be encouraging distributed-scale RE projects as a way for
homeowners, business owners, and communities to become energy producers. While the installed cost for solar and wind energy has decreased
significantly in recent years, the up-front investment can still be
substantial. Federal income tax credits help defray installation costs to
some degree. SB 58 will provide an added incentive to South Dakotans
seeking to invest in these clean sources of energy.

A concern has been raised in Senate committee that SB 58 will reduce tax
revenues. However, as very few distributed-scale RE systems presently exist
within our state, it means that most of the projects that will be exempt
from the tax assessment have yet to be built. County tax assessors will
simply not assess new RE projects—it will be “as if they never happened.”
According to the state Public Utilities Commission, only a few RE systems
currently exist, and reduction in tax revenue from these will be negligible.

On the other hand, without the passage of SB 58, it is likely that fewer
distributed-scale RE systems will be installed than with SB 58. Let’s pass
SB 58 to maximize the economic development, local jobs, and clean energy
that renewable energy can bring to South Dakota.

SB 58, has passed Senate State Affairs Committee. Contact your own state
district senator to urge support for this good bill on the senate floor for
a vote by the full Senate. Start informing your two district
representatives that SB 58 is probably headed to the House for their
approval.

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Other bills of interest:

SB 59: Provided contractors’ excise tax break for small renewable energy
projects was tabled in committee.

SB 61: Utilities will post rates they’ll pay for renewable energy
electricity. Passed State Affairs unanimously.

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