January 14, 2011
Wyoming

Wyoming lawmaker proposes wind excise tax

By JEREMY PELZER, Star-Tribune capital bureau, trib.com 14 January 2011

CHEYENNE – Wyoming legislators are drawing up separate pieces of legislation that would change the way wind energy is taxed and the revenue is distributed in Wyoming.

State Rep. Tim Stubson, R-Casper, is drafting a bill that would combine the upcoming $1-per-megawatt-hour wind energy tax and the sales tax on wind energy equipment into a single $3-per-megawatt-hour excise tax.

The proposed new tax would only apply to wind farms that begin operation after July 1.

Right now, existing wind farms would pay the $1-per-megawatt-hour excise tax when it takes effect in 2012. A sales tax exemption on renewable energy equipment is set to expire at the end of this year.

Stubson said his proposal would bring in slightly more revenue for state and local governments than the current tax system. At the same time, he said, his plan would also encourage growth in Wyoming’s nascent wind energy industry.

That’s because wind companies would otherwise have to pay millions in sales taxes when they buy the turbines, machinery and other equipment for new wind farms, Stubson said. Those companies would often have to borrow large amounts of money to pay up-front sales taxes, he said, which means they would pay millions in interest payments over the years.

Stubson said some economic models show that his proposal would save wind developers about $30 million over 20 years for an average-sized wind project.

Stubson said his plan would also increase revenue for state and local governments. Local governments and the state split sales tax revenue 65-35, respectively, and will divide the wind excise tax revenue 60-40.

The bump in revenue would be relatively small, Stubson said. An average-sized wind farm, he said, would perhaps pay an additional $4 million or $5 million over 20 years.

Cheryl Riley is executive director of the Wyoming Power Producers Coalition, a group of Wyoming independent wind developers. She said her group was supportive of the proposals.

“It should be a win-win. I don’t know who would oppose this,” Riley said. “I think it’s going to make wind projects in Wyoming more competitive with other states, and I think that it’s going to definitely create more robust wind development in the state.”

Meanwhile, state Rep. Jim Roscoe, D-Wilson, is writing a different bill that would divert part of the excise tax revenue to help wildlife affected by wind farms.

Roscoe wants to take 2 percent of the state’s 40 percent cut of the excise revenue and give it to the Wyoming Wildlife and Natural Resources Trust fund, an independent state agency that works to enhance and conserve wildlife habitat and natural resource values across the state.

“Let’s say a wind farm was to interrupt a migration corridor,” Roscoe said, offering an example. “This money could be used for conserving land outside of the edge of the wind development.”

Roscoe said such projects have “worked really well” to help wildlife near oil and gas projects in his district, which includes much of Sublette County and parts of Lincoln and Teton counties.

Both Stubson and Roscoe said they planned to file their bills by the end of the week.

URL to article:  https://www.wind-watch.org/news/2011/01/14/wyoming-lawmaker-proposes-wind-excise-tax/