February 10, 2018
Wyoming

Wyoming lawmakers propose taxing solar, increasing wind tax

Heather Richards | Star-Tribune | Feb 8, 2018 | trib.com

Lawmakers will again consider hiking Wyoming’s controversial wind tax, and this time they may expand it to include utility-scale solar facilities in the Cowboy State.

House Bill 118, sponsored by Rep. Thomas Crank, R-Kemmerer, proposes levying a $2 per megawatt hour tax on renewable energy produced in Wyoming, amending prior language that applied a $1 per megawatt hour tax on wind power. It’s among dozens of bills that lawmakers will consider when the Legislature convenes Monday in Cheyenne.

The measure also introduces a discount on those taxes. If a company manufactures and installs its wind or solar facilities in Wyoming, the cost of equipment may be subtracted from the tax bill.

Crank said he hoped the bill would entice manufacturers to Wyoming, allowing jobs and economic diversity to follow the expected boom of renewable development.

Wyoming is largely financially dependent on taxing its various fossil fuels resources, from coal and uranium, to oil and gas. It introduced a tax on power generated from its prime wind resources in 2012. New wind development slowed after the introduction of that tax, but is expected to increase in the coming years as developers take advantage of a federal tax credit set to expire in 2020.

Rep. Mike Madden, R-Buffalo, is a cosponsor of HB 118. His position on taxing solar is no different than his long-held support for taxing wind power, he said.

“I think we have to be fair. That’s my whole thesis,” he said. “To make it on par with other generations sources.”

Madden said he has some hesitation about the amount of credit companies would be able to receive in lieu of paying taxes, according to the bill’s current language.

Considering the cost of turbine blades and solar panels, it seems possible that companies could avoid paying the tax for years before Wyoming recouped that revenue stream, he said.

Crank, the bill’s sponsor, said he wasn’t concerned by that.

“I’m not really in favor of, here’s a tax just ‘cause we need the money,” he said. “If at the end of the day for those producers … they don’t incur any tax and we get some more people working, I’m OK with that.”

Allowing producers access to a tax credit was the selling point for another co-sponsor, Rep. Timothy Hallinan, R-Gillette.

“It’s a good way to promote some economic diversification, which is the big talking point amongst everybody anymore,” he said.

HB 118 includes a grace period of one year before a new renewable facility has to pay the generation tax.

Taxing wind development has long been controversial in the state. Companies warn it dampens the burgeoning industry, and proponents argue the state should get a financial benefit equal to the impact of large wind farms.

An attempt to increase the tax to $5 per megawatt hour failed last year. Developers of the Chokecherry Sierra Madre wind project, a 1,000 turbine-proposal that is in the construction phase, said at the time that a tax hike would increase the company’s tax burden from $800 million to about $1.8 billion.

The company does not support HB 118, nor is it convinced of the benefit of the tax credit for manufacturing in-state.

“This bill is another attempt to increase a tax that has been voted down by the revenue committee four separate times,” said Bill Miller, president and CEO of Power Company of Wyoming, the Chokecherry developer, in an email. “The bill’s tax credit for renewable energy equipment manufactured and installed in the state would have no effect, because at this time there is no wind energy equipment manufactured in Wyoming.”

Lawmakers that support the tax increase have disputed the impact of the state’s tax, in part because producers receive a healthy federal credit for generating wind power.

Wyoming is the only state with a true tax on wind generation. One other state taxes wind production instead of taxing wind property.

There are a number of wind facilities now in development or construction phases in Wyoming. There are no utility-scale solar powered facilities under construction in the state. Some private solar farms are planned in the near term to sell electricity to Rocky Mountain Power, Wyoming’s largest utility.

On proposing a solar tax prior to having any large solar projects in the state, Madden said it was only a matter of time.

“We don’t have any yet,” he said. “But no doubt it’s going to come.”


URL to article:  https://www.wind-watch.org/news/2018/02/10/wyoming-lawmakers-propose-taxing-solar-increasing-wind-tax/