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Commission discusses how to assess battery energy storage systems; ownership and PSC role unclear
Summary
County officials reviewed preliminary research on tax assessment and ownership structures for proposed battery energy storage systems tied to wind projects, saying state agencies will likely need to clarify assessment rules.
Emmons County officials discussed how large battery energy storage systems (BESS) proposed near wind facilities would be taxed and assessed, and concluded the matter depends on ownership and operating structure.
A staff member who reviewed assessment practice told the commission there are three possible assessment scenarios: (1) centrally assessed by the state if the system is part of a larger utility or centrally metered entity; (2) locally assessed if the BESS is an independent taxable entity; or (3) assessed on production/usage metrics if taxed as energy output. The staff memo urged the county to determine whether the batteries will be owned by NextEra (or a NextEra-affiliated LLC), leased to other entities, or operated as a distinct company.
Commissioners said the county should wait for determinations from the North Dakota Public Service Commission and the state tax department. One commissioner noted the public hearing had clarified that the battery company may draw power from the grid (buying lower-cost power) to charge batteries and later sell or dispatch energy during price spikes, meaning batteries may interact with the grid independently of turbine output.
Staff recommended the county confirm three items before designing a local tax approach: ownership (which legal entity owns the BESS), how income from the facility will be reported, and how much energy flows through the batteries. The commission assigned staff to make additional calls to the state tax department, the Public Service Commission and to NextEra representatives to gather specific ownership and operational details.
The commission noted Emmons County will likely be among the first jurisdictions in the state to see this configuration and that statewide guidance or amendments to Century Code may follow. Commissioners asked staff to monitor state activity and report back when PSC approvals or clearer guidance arrives.
