Iowa Supreme Court Affirms Property Tax Assessment of “Repowered” Wind Plant

May 30, 2023 | Kitt Tovar

An energy company began replacing a substantial portion of components in wind plants it owned and operated. However, the county assessor continued to value the property the same for property tax purposes. The energy company appealed the assessment and claimed that this “repowering” restarted the graduated tax valuation schedule under Iowa Code § 427B.26. Because the entire wind plant was not replaced, the Iowa Supreme Court affirmed that the repowering project did not alter the property tax valuation.


An energy company owned and operated a “wind energy conversion property.”[i]  In 2008, the energy company placed several wind plants into service. The county assessor first assessed the property the following year. Under Iowa Code § 247B.26(2), wind energy conversion properties receive a special valuation. For the first assessment year, the property is initially valued at zero percent of the “net acquisition costs.” The valuation gradually increases five percent each year until it caps out in the seventh assessment year. From the seventh year on, the property is valued at 30 percent of the net acquisition cost. Accordingly, the country assessor valued the wind plants at 30 percent of the net acquisition cost starting in 2015.

In 2019, the company began a “repowering” project by removing and replacing old wind plant technology and parts. Despite these changes, the county assessor continued to value and assess the wind plants the same. The company appealed the valuation to the County Board of Review and asked the Board to modify the assessment. Specifically, the energy company claimed that 1) the net acquisition costs of the old wind plant components should be replaced with the net acquisition costs of the new wind plant components and 2) the phased-in assessment percentages should be restarted.

The Board declined to adjust the assessment. On appeal to the district court, the wind energy company moved for summary judgment. The district court denied the energy company’s motion. The energy company appealed.

Special Valuation of Wind Energy Conversion Property

The Supreme Court held that Iowa Code § 426B.26 did not support the energy company’s argument that wind plant replacement parts should receive their own separate, restarted valuation schedule. First, the Court noted that Iowa Code § 426B.26 clearly defines wind energy conversion property to include the entire wind plant. The statute also only provides one formula to calculate the valuation by using the wind plant’s assessment year and net acquisition costs.

The net acquisition cost is “the acquired cost of the property including all foundations and installation cost less any excess cost adjustment.” Iowa Code § 427B.26(4). The only property mentioned in the statute is a wind energy conversion property. As such, the Court held that the net acquisition costs are the original cost of acquiring the entire property.  In this case, the wind energy company did not add or replace an entire wind plant or even the foundation, it simply replaced certain parts.

The energy company also argued that because the 2019 version[ii] of the statute at issue did not mention repowering, the statute was ambiguous. The Court rejected this argument determining that the statute’s failure to address a repowering did not make it ambiguous. Thus, the Supreme Court affirmed the district court finding that a “repowering” does not change the property tax valuation schedule of a wind plant.


[i] “Wind energy conversion property” means the entire wind plant including, but not limited to, a wind charger, windmill, wind turbine, tower and electrical equipment, pad mount transformers, power lines, and substation. Iowa Code §427B.26(4)(d)

[ii] In 2022, the Iowa Legislature amended the statute to specially provide that “repowering wind energy conversion property shall not cause the wind energy conversion property to receive a new assessment schedule.” Iowa Legis. S.F. 2366 (2022).