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Committee hears industry push to extend coal conversion tax relief for 10 years
Summary
Utilities, lignite producers and county stakeholders told the House Finance and Taxation Committee that extending a state-level coal conversion tax holiday will support grid reliability, jobs and long-term investments; at least one Mercer County commissioner urged maintaining county tax revenue and proposed distribution changes.
Representative Anna Novak introduced House Bill 1279, which would extend state-level coal conversion tax relief for lignite-fired power plants. Novak framed the measure as support for affordable, reliable electricity in communities reliant on lignite generation and said the bill would not affect the coal severance tax or local portions of the coal conversion tax.
"Lignite power plants are the backbone of North Dakota's energy grid," Novak said, urging the committee to support the bill and arguing producers face rising maintenance, regulatory and insurance costs that could be passed to ratepayers if plants close. She also said the bill provides a 10-year state-level tax holiday for conversion taxes to give plants planning certainty.
The hearing drew broad industry support. Jonathan Fortner of the Lignite Energy Council told the committee that federal regulatory pressure and changes in capital access have increased costs for plants and said the extension is necessary to protect grid reliability and jobs. "This bill extends the current coal conversion tax relief from the state general fund for 10 years and helps level the playing field for coal," Fortner said.
Representatives of power producers and cooperatives — including Jessica Bell of Rainbow Energy Center, Ryan Norell of Basin Electric, Carly McLeod of Minnkota Power Cooperative and Jeff Simon of the Western Dakota Energy Association — described plant investments, market constraints and the role of lignite in providing baseload power. Basin Electric estimated prior relief saved the cooperative roughly $60 million over five years and said a 10-year extension could save another $120 million or more, figures witnesses said are passed on to members and ratepayers.
Opposition testimony highlighted county revenue concerns. Mercer County Commissioner Casey Voigt, testifying as a citizen and county commissioner, said Mercer County faces large infrastructure backlogs—he cited roughly $100 million of deferred maintenance needs across county infrastructure and local projects—and worried a long state exemption would reduce local resources. He proposed adjusting the state-local distribution of conversion-tax revenue to give counties a larger share and urged more local input on large tax breaks.
Committee members asked questions about the timeframe and rationale for a 10-year horizon; industry witnesses said plants plan on 10-year capital cycles and that the existing five-year holiday is set to expire in 2026, making an extension timely for financing and multi-year maintenance cycles. Several county officials and representatives suggested potential amendments to shift a greater share of conversion revenues to counties, and industry witnesses noted counties can already grant partial or complete exemptions for their portion of taxes in some cases.
No formal committee vote occurred; sponsors and stakeholders indicated further negotiations on distribution and fiscal impacts would continue.
