The tax was adopted October 25 by the county Board of Supervisors, to go into effect in 30 days. But as soon as SMUD receives its first tax bill, the utility will file a lawsuit against it, arguing that Solano County has no authority to tax another government entity, says SMUD attorney Arlen Orchard. He expects that the utility, which owns a 5 MW wind farm of Kenetech Model 33M-VS wind turbines, will receive its first tax bill in April next year.
Thse issue of taxing the wind farm has been controversial in Solano for some time. County attempts to tax SMUD in the past have been unsuccessful. A government entity, it does not pay property tax, but some in Solano resent that wind farm property is not taxed, while the power is exported to the state capital of Sacramento some miles distant. It appears the new tax is not an attempt to put a levy on all future development of wind county wide, but is to target SMUD specifically.
The tax was originally set at one-third of a mill per kWh -- or three-hundredths of a cent per kWh. Before lobbying by Kenetech and the utility, it was to be set at five mills, which would have raised $225,000 a year from the one 5 MW project alone.