North Dakota Adopts Incentives for Wind, Hydrogen, Alternative Fuels

April 27, 2005

North Dakota Governor John Hoeven signed several bills into law on Earth Day to accelerate wind power, hydrogen, and alternative fuel technologies in the state. The wind energy provisions reduce the siting application fees, lessen the regulatory burden for siting wind plants, allow the sale of renewable energy credits to other states, and promote new investments in transmission lines. A pending bill will also cut in half the assessed value of a wind plant for tax purposes. One bill also creates a sales tax exemption on hydrogen used to power either an internal combustion engine or a fuel cell.

A photo of a fuel pump labeled 'E-85 Ethanol.'

The new legislation will encourage the production and sale of alternative fuels throughout North Dakota.
Credit: Warren Gretz

Several bills relate to ethanol and biodiesel production. The ethanol-related bills provide $3.25 million in incentives for new and existing ethanol plants in the state, $1.35 million in incentives to expand existing ethanol plants, and a 20-cent-per-gallon tax incentive for retail sales of E85 (a blend of 85 percent ethanol and 15 percent gasoline), an incentive that must be passed on to the consumer. The biodiesel provisions include $1.2 million to buy down interest on new biodiesel production plants, income tax credits for fuel suppliers and retailers, and a sales tax exemption for equipment that allows a facility to sell biodiesel blends. New ethanol and biodiesel production plants will also earn a 30 percent investment tax credit.

In addition, the new legislation creates an Office of Renewable Energy within the Division of Community Services at the North Dakota Commerce Department. The new office will assist in the development of renewable energy within the state and promote the conservation of energy and the wise use of energy resources in both the public and private sectors. See the governor's press release.