Revenue Flow From Power Lines Varies From State To State
by Johnathan Hladik
Transmission projects announced during the last 10 years are now beginning to come online. Combined with new wind and solar installments, these projects have become important pieces of the economic puzzle in the rural Midwest and Great Plains. The significance of renewable energy to rural economic development is well understood; however, less is known about the impact of transmission development.
We explore this further in our newest report, “Generation and Delivery: the Economic Impact of Transmission Infrastructure in Rural Counties.” We examined state statutes governing revenue collection, distribution, and implementation at the local level in three states – Minnesota, Wisconsin, and Kansas.
As our examples illustrate, there is considerable variation in the flow of revenues from power lines. Each approach reflects different priorities and fiscal realities of the administering state. In each case, communities affected by transmission development realize significant benefits only when state law allows for most or all of this revenue to be invested locally.
Our analysis shows that when states grant community stakeholders the power to decide how and where new revenue is used, they maximize benefits to affected residents. This decision-making power makes neighbors likely to embrace and encourage future economic development. Conversely, states that provide utility tax incentives to encourage construction miss an ideal opportunity to invest in rural communities.
Local communities are on the frontline of any transmission project. Because of this, it is reasonable that any revenue derived be invested back in those communities. We recommend policymakers guarantee local government’s access to this revenue and engage citizen stakeholders in determining how it is used.
To view the report, visit www.cfra.org/GenerationAndDelivery.