Published in Michigan Environmental Law Journal, Spring 2018, Vol. 36, No. 1, Issue 104 [view full issue].
Cite: 36 Mich Env Law J 1 (2018)
Preparing Communities for a Clean Energy Future: Lessons for Local Government
by Stanley “Skip” Pruss, former Director of the Michigan Department of Energy, Labor, & Economic Growth and Michigan’s Chief Energy Officer
Wind and solar energy projects are proliferating across rural landscapes in Michigan. The enactment of the Clean, Renewable, and Efficient Energy Act in 2008, requiring Michigan electric providers to derive 10 percent of retail supply from renewable energy sources, resulted in the development of wind energy projects concentrated in areas of comparatively strong wind resources—primarily in Michigan’s “Thumb” and in Gratiot County. The 2016 Clean and Renewable Energy and Energy Waste Reduction Act increased the renewable energy standard, requiring Michigan electric providers to achieve a retail supply portfolio with 15 percent renewable energy in 2021.
The expansion of wind energy projects has brought both benefits and challenges to rural communities and local governance. Township and county officials responsible for planning and land use decisions find themselves confronted with competing local interests: Landowners and businesses welcome utilities and wind energy developers investing large amounts of capital with the attendant local economic benefits; while other constituents regard wind energy projects as altering landscapes, diminishing aesthetic values and changing their accustomed “sense of place.” Navigating these disparate interests can be challenging for local leaders and elected officials who find themselves in the middle of disputes dividing friends and neighbors.
The Wind Energy Stakeholders Committee
With these dynamics as a backdrop, the Mott Foundation funded a year-long effort to better understand the areas of conflict within communities, the challenges confronting local community leaders, the perspectives of utilities and wind energy project developers, and areas of common agreement among all stakeholders. To this end, the Wind Energy Stakeholders Committee (WESC) was impaneled with the objectives of learning from the experiences of the local actors in communities that host wind farms, mitigating conflict, better equipping local officials to anticipate and mediate disparate community interests, and improving community engagement efforts by utilities and developers.
The WESC was comprised of stakeholders familiar with challenges facing wind development in Michigan and included representation from the Michigan Township Association, Michigan Association of Counties, Michigan Farm Bureau, University of Michigan’s Ford Policy School, the Michigan Department of Agriculture and Rural Development, Gratiot-Isabella Regional Education Service District, Michigan utilities, wind developers, local officials, political leaders, agricultural interests, the faith community, and legal representatives.
The shared, collective experience of WESC members and research and survey information regarding community attitudes and concerns provided the insights and guidance that served as the basis for Lessons Learned: Community Engagement for Wind Energy Development in Michigan, a report that was the major deliverable of the WESC.
Mediating Local Conflict—Local Officials in the Crosshairs
When wind energy projects are proposed in a township or county, local officials may find themselves unprepared and in need of guidance and assistance. Local officials may be unaware of project plans and land leasing activities as project developers may not have publicly announced their intentions for competitive reasons. Local elected officials involved in Michigan’s early wind developments, often had inadequate expertise and capacity to fully evaluate a project or its impact. Despite these limitations, local officials had to act on behalf of their constituents in navigating many difficult issues regarding the benefits and burdens wind energy projects brought to their communities.
A wind development project is a complex, multi-stage enterprise affecting the local landscape, community character, and citizen expectations. Community members will have differing reactions and sensitivities to the presence of wind turbines. It is important to recognize that the concerns of community members are real and shape attitudes and levels of community acceptance. And although wind developers are working to minimize aspects of wind energy like noise and night lighting through good siting practices and improved technologies, the tradeoffs communities face must be acknowledged and understood. As constituents become aware of wind energy projects, they will have questions concerning visual impairments, noise, setbacks, property values, and changes to character of the community. They will expect that their local leaders will be responsive and have answers.
Siting new wind farms is often contentious, and the importance of community engagement cannot be overstated. Both local officials and wind developers benefit greatly from communicating with constituents early and often. Providing accurate information that anticipates and addresses community issues and concerns is imperative. Surveys conducted by the University of Michigan Ford School’s Center for Local, State, and Urban Policy show a strong correlation between the level of community acceptance of wind farms and citizen’s perception of transparency and inclusion in the development process. Constituents who perceive that local officials are acting in their best interest show considerably more support for wind turbines in their communities.
Learning from the experiences of communities where wind farms are already established can be very helpful. Counties in Michigan’s “Thumb”—Huron, Sanilac, and Tuscola—have high wind turbine densities, as does Gratiot County in Central Michigan. While many counties and townships in the Thumb have recently enacted moratoria to stop or slow the pace of new wind energy projects, community acceptance of wind energy in Gratiot County remains high. The difference in community attitudes may be attributable, in part, to proactive, frequent community engagement. “When wind developers engage the community and work together with community members and leaders, wind power can bring many economic opportunities and much-needed revenue to our communities. That’s what happened in my community in Gratiot County,” explained Don Schurr, the recently retired former president of Greater Gratiot Economic Development.
Benefits to Local Communities
Wind energy projects bring substantial financial benefits to local economies. Wind turbines are taxed as industrial personal property and electric transmission and distribution systems and substations are taxed as utility personal property. In Michigan, capital investment in wind farm infrastructure has exceeded $3 billion since 2010. The large influx of capital has raised the total taxable value of property in rural agricultural counties. Data from the Michigan Department of Treasury shows that the average increase in taxable value for Michigan’s 83 counties for the years 2011 through 2015 was 1.28 percent with 21 counties showing a reduction in taxable values. However, for the counties hosting the largest number of wind turbines—Huron and Gratiot—the increase in total taxable value of property for years 2011 through 2015 was 34 and 38 percent, respectively.
Tax revenue from wind energy projects supplements county and township budgets, supporting school districts and an array of community services including fire, police and emergency services, senior programs, parks and recreation, and road and bridge maintenance. Additional tax revenue flowing to county local governments from wind projects in Huron and Gratiot in 2014–2015 totaled $45,761,000. Tax liability is, however, based upon the true cash value of the wind turbine components and land improvements (except buildings) that depreciate incrementally by 70 percent over 10 years. Therefore, absent new wind energy projects being commissioned or old projects being repowered with updated technologies, local tax revenue will diminish over time, potentially resulting in fiscal stress to local programs and schools that benefitted from higher tax revenues.
In addition to community-wide tax benefits, annual lease payments to landowners range from $5,000–$10,000 per turbine. With 1,032 wind turbines operating in Michigan, payments to landowners hosting wind turbines range from $5–10 million annually. These payments provide steady, reliable income streams. In addition, most wind developers offer compensation to property owners without turbines on their land who live within the project’s geographic footprint. Though the aggregate amount of annual payments to all property owners is unknown, the payments to property owners provide a boost to local economies. Survey research indicates that landowners who receive compensation are significantly more supportive of wind projects in their communities. The research also indicates that farmers having wind turbines on their property bought more farmland and invested twice as much money in home improvements, outbuildings, farm equipment, and drainage and irrigation systems than their neighbors and landowners in townships without windfarms. These farmers are also more likely to have a succession plan for their farms, which may help preserve agricultural land.
Energy Markets in Transition
Future trends suggest that more local governments will need to prepare for the prospect of renewable energy projects coming to their communities. Renewable energy resources are steadily displacing coal fired electric generation plants as costs continue to decline. Michigan’s primary electric service providers, DTE Energy and Consumers Energy, have announced plans for 80 percent reductions in carbon emissions by phasing out all coal power units, to be replaced, in significant part, with utility-scale wind and solar energy projects. DTE Energy’s announced plans would sextuple the amount of renewable energy resources it has deployed, from approximately 1,000–6,000 MW. Wolverine Power, provider of electricity to five electric cooperatives serving customers in over 40 northern Michigan counties, already derives 56 percent of its electricity supply from zero-carbon energy sources.
Wind energy is becoming the least expensive, new generation resource available to electric service providers. Global leaders like Google, Apple, Facebook, Amazon, Microsoft, Intel, eBay, and many other companies have 100 percent zero-carbon energy goals, are purchasing electricity from wind and solar energy projects, and are making investment decisions based, in part, on the availability of clean energy. General Motors’ announced goal is to operate all of its 350 facilities in 59 countries with 100 percent renewable energy. Dow Chemical Company is one of the largest industrial purchasers of wind energy in the United States and Michigan-based Steelcase and Herman Miller already acquire sufficient renewable energy to power all of their operations. Recently, the data server company, Switch, made one of the largest capital investments in Michigan history contingent on Consumers Energy delivering 100 percent of its electricity needs from wind energy.
Surveys indicate strong public support for clean energy technologies. Recent polling indicates that 72 percent of Michigan residents and 81 percent of adults nationwide age 19–81 support a goal of attaining 100 percent of electricity from clean energy sources. The July 2017 National Surveys on Energy and Environment conducted by the University of Michigan and Muhlenberg College found that 89 percent of Americans support increasing the use of solar energy and 83 percent support the greater use of wind energy. The confluence of improving clean energy technologies, dramatic costs reductions, and business and consumer preferences for clean energy will likely accelerate efforts to site clean energy projects for years to come.
Lessons for Local Elected Officials
Early wind energy development projects were learning experiences for both wind developers and local communities. The experiences drawn from the siting of these operating projects provide valuable insights to inform future projects.
Building and sustaining community support for clean energy projects requires continuous outreach to stakeholders to develop relationships, credibility and trust. It entails efforts at mutual education through listening, effective communication, and sensitivity to community concerns. And it requires convening community participants representing both citizens and key community actors in well-organized and structured forums with shared goals and objectives.
All effective locally focused collaborations share a common characteristic—they foster and galvanize community stakeholders to common vision and purpose, creating sustained relationships that aggregate and leverage private, governmental, and community assets. The WESC found that collaborative efforts must be continuous from the time the project is first proposed, through construction, during its operational lifetime, and through decommissioning. Wind developers and utilities should maintain a continuous community presence with a staffed office within the community so that issues and concerns can be addressed as they arise.
Survey research conducted in Michigan indicates that when community members feel that they are participating in project planning in a transparent process, support for wind projects increases considerably. The research also clearly indicates that when property owners who are within or near the project area (in addition to those having turbines on their property) receive compensation, community support for projects increases substantially.
The challenges facing local officials and wind developers in transitioning to market-driven clean energy resources are considerable. Learning from past experiences and anticipating future concerns offers a workable pathway forward.
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 Wind turbines classified as industrial personal property are not assessed the 6-mill state education tax or the 18-mill school operating tax; utility personal property is assessed the 24 mills tax. See MCL 211.9k.
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