Bill Description: House Bill 387 would require a substantial "decommissioning deposit" before wind turbines could be constructed, even though wind turbines operate for decades before needing to be decommissioned.
Rating: -3
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
House Bill 387 would create Section 67-2362, Idaho Code, to impose an onerous "decommissioning deposit" requirement on "any person constructing a wind turbine site on land that is within the state of Idaho, regardless of ownership status."
The bill says, "Prior to commencing construction on a wind turbine site on any land within the state of Idaho, the owner shall remit to the state treasurer a decommissioning deposit in the form of a cash deposit in an amount determined by the department to be equal to the reasonably anticipated cost of fully decommissioning a wind turbine site."
The cost of decommissioning a wind turbine can be substantial, at upwards of several hundred thousand dollars. But a turbine typically lasts for 20-30 years. Expecting a company to make a cash deposit for business costs that won't be incurred for decades is unreasonable and inconsistent with normal business practices.
The bill says any owner who fails to submit the decommissioning deposit will be subject to an administrative penalty of up to $2,500 per wind turbine site per day. (This is an annual penalty of more than $900,000.)
(-1)
Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?
Additionally unreasonable is a provision that the interest earned on these decommissioning deposits "shall be deposited in the state general fund." (A $400,000 deposit would generate more than $1.3 million in interest over 30 years at a modest return rate of 5%.)
Alternatively, the required deposit could be reduced from the "amount determined by the department to be equal to the reasonably anticipated cost of fully decommissioning a wind turbine site" to the amount necessary to reach the department’s anticipated cost over the anticipated life span of a wind turbine.
Using the same estimates of $400,000 to decommission a wind turbine after 30 years and a 5% rate of return, an initial deposit of $93,000 would suffice.
This decommissioning deposit required by this bill is effectively a high confiscatory tax intended to discourage the construction of wind turbines.
(-1)
Does it violate the principle of equal protection under the law? Examples include laws that discriminate or differentiate based on age, gender, or religion or which apply laws, regulations, rules, or penalties differently based on such characteristics. Conversely, does it restore or protect the principle of equal protection under the law?
Many different kinds of commercial and industrial installations require eventual decommissioning (underground fuel tanks at gas stations is one example), yet Idaho law does not impose similarly onerous deposit requirements on them.
This bill uniquely targets wind turbines with this requirement in order to make Idaho an unattractive location for their construction. This bill is a rather obvious attempt to manipulate the market.
(-1)
Why upfront collection of decommissioning fees is needed:
When a wind turbine fails, it is a very expensive project to repair or remove the turbine. Very often, the company who did the original install is bankrupt and long-gone. Taxpayers, property owners, rate payers end up paying for the repair or removal.