Texas Attorney General Opinion Creates Uncertainty For Wind Energy Developers

An opinion recently issued by the Texas Attorney General appears to call into question the ability of county governments to grant property tax abatements for wind energy generation equipment. Given both the large investment in generation equipment required for wind energy development and the important role that property tax abatements play in project economics, the opinion is generating a great deal of discussion and uncertainty in Texas amongst wind energy developers and local elected officials alike.

At issue in the opinion was a situation involving a wind farm that was sited on land that was being leased by the developer/owner of the project and for which property tax abatement was being sought. The opinion begins with the proposition that Section 312.402(a) of the Tax Code authorizes counties to "execute a tax abatement agreement with the owner of taxable real property." The opinion additionally