Southern Alberta municipalities receive substantial revenue from renewable energy projects, says new analysis

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A non-profit organization that opposes the province’s moratorium on new renewable energy projects has released an analysis that shows Alberta municipalities collect millions in taxes from solar and wind projects.

The Business Renewables Centre-Canada (BRC-Canada), an initiative of think-tank the Pembina Institute, says the municipal tax revenue coming in from renewable energy has almost tripled to $28 million since first being estimated in 2017. BRC-Canada says it calculated the tax revenue of each municipality by using the 2022 assessed value of each renewable project, and each county’s or municipal district’s tax rate.

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The analysis found that some southern Alberta municipalities receive a substantial amount of tax revenues from wind and solar projects. For example, the County of Forty Mile, a rural municipality in southeastern Alberta between Lethbridge and Medicine Hat, collects 50 per cent of its tax revenues from renewable projects, while the municipal districts of Pincher Creek and Willow Creek, based in Claresholm, collect around 30 per cent, according to the analysis.

“What we wanted to do was put a number on (how much revenue municipalities receive) and highlight how much benefit is going to municipalities,” Jorden Dye, director of BRC-Canada, told Postmedia. “Eight of the 18 districts with renewable energy projects are receiving over $1 million.”

Renewable energy projects offer municipalities long-term revenue streams and allow them to plan for the future, he said.

“Whether that’s keeping property taxes for residents low or new investments in the community, we just want to highlight the role renewable energy projects are playing in helping stabilize municipal revenues,” said Dye.

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BRC-Canada believes the province’s seven-month moratorium on the approval of new renewable projects over one megawatt — the pause ends Feb. 29, 2024 — was “short-sighted” and is hurting municipalities.

“At a minimum, that pause pushes back any projects that weren’t already under construction until at least March,” said Dye, also delaying when municipalities will receive revenue from those projects.

Based on the 2022 calculations and the projects currently in the Alberta Electric System Operator queue for approval, the municipalities can expect that amount to grow by an additional $170 million to $250 million in just a few years, he said.

“We’re still at the very beginning of this revenue curve for municipalities. That’s what we’re worried about the moratorium jeopardizing.”

BRC Municipal Taxes Map
This Business Renewables Centre-Canada graphic shows that the total taxes paid in 2022 to Alberta municipalities for solar and wind projects was $28 million. Graphic supplied to Postmedia Calgary by Business Renewables Centre-Canada

Pembina Institute findings released alongside the analysis showed 75 per cent of Albertans, including 66 per cent of those living outside of Edmonton and Calgary, would like to see more renewable energy projects where they live, said Dye.

“That finding really aligns with what we’re seeing, from value to landowners to value to municipalities,” he said. “We’re an energy province, and the people of Alberta want to see us build more energy projects.”

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Vulcan County Reeve Jason Schneider said renewable energy projects make up more than 40 per cent of the municipality’s assessment base and has played a big role in diversifying the municipality’s tax base.

“We’re trying to do a bit of a hybrid where we’re trying to invest some of the money, lower taxes to make Vulcan County even more attractive to people to live, to work, to run their businesses in,” Schneider said.

The county is home to a 300-megawatt wind project, Blackspring Ridge, and Canada’s largest solar project, the 465-megawatt Travers Solar. Construction also began earlier this year on the 514.6-megawatt Buffalo Plains wind project. It’s led to a dramatic shift in revenue streams for Vulcan County, which in the past few years has seen a significant decline in revenue from oil and gas projects.

However, the municipality’s council favours the moratorium to give the province time to look at regulatory changes around project placement and reclamation, and transmission line capacity, said Schneider.

“We’re saying, ‘Don’t kill it, it’s been very good to Vulcan County, but we just want good developers,” he said.

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