Proponents of a steeper wind tax in Wyoming intend to put the issue on the 2020 ballot after Speaker of the House Steve Harshman (R-Casper) refused to allow debate of bills raising the tax for the second year in a row.
The ballot initiative effort predates the legislative session, but Sen. Cale Case (R-Lander) said the refusal by Harshman and Senate President Drew Perkins (R-Casper) to allow debate emphasizes the need for the initiative.
“You can’t say the Legislature voted against it,” Case said. “They weren’t heard.” Case called the leadership’s blocking of the bills an “autocratic” move that stifled the democratic process.
“That’s not right and that’s not fair to the people of Wyoming,” Case said.
Speaking to reporters on Feb. 8, Harshman and Perkins both said the time was not right to impose taxes or restrictions on the wind industry. Harshman stifled three proposals to increase the wind tax, which like all tax increases have to begin in the House under the Wyoming Constitution.
Perkins held back a bill sponsored by Case that would block wind companies from exercising eminent domain over private landowners like other power utility companies have the power to do. Harshman held back a similar bill in the House. Harshman also held back bills to repeal the current wind tax, however.
The industry is just taking off in Wyoming, the two chamber leaders said, and it would be a bad time to scare developers.
“The thing that business and everybody wants is a little bit … you’ve got to have a little bit more of a certainty and consistency,” Harshman said.
Perkins described himself as “not a big fan” of wind energy. He said it is not as environmentally friendly as portrayed given the expanses of land wind farms occupy and the amount of concrete used to make the foundation for each turbine. Concrete production is a large emitter of carbon dioxide, a greenhouse gas and driver of climate change.
But, “regardless of how you feel about wind,” Perkins said, “those people have gone out, they’ve done their contracts … they’ve gone through their environmental impact statements and for the Legislature to come back at this time and just stay stop, that’s hard to do.”
Wind production in Wyoming is taxed at $1 per megawatt hour. Like other Wyoming energy industries, the wind industry pays steeper property taxes than residents. It also pays sales and use taxes.
The largest project in Wyoming is the Chokecherry and Sierra Madre Wind Energy Project proposed by Philip Anschutz’s Power Company of Wyoming. The company estimates that the project will pay $850 million in combined property, sales and Wyoming wind production taxes over the course of construction and 20 years of operations. The company estimates the 1,000 turbine wind farm will be completed by 2026.
Wind tax supporters say the time to implement a higher tax is now, so that companies have a fair sense of what the cost of doing business in Wyoming will be.
But tax proponents like Case, who detractors sometimes label ‘anti-wind,’ also believe the state is on the cusp of a wind farm explosion that could dramatically change the landscape. Companies are in a rush to install turbines before a tax credit begins winding down in 2021. Case wants to implement a steeper state tax before that happens.
“Our landscape is permanent,” Case said. “It’s fixed and it’s special and the fact that its fate is decided by a tax credit is kind of repulsive to me.”
Wind Wyoming’s Way
Case and others around the state have begun an initiative called Wind Wyoming’s Way. They hope to overcome the state’s high hurdles to ballot initiatives and put the question of an increased wind tax to Wyoming voters in 2020. Wind Wyoming’s Way seeks to raise the tax to $5 per megawatt hour. The initiative also seeks to remove a tax exemption for the first three years of production.
To succeed by 2020, organizers will have to secure 30,750 signatures, they wrote in a press release announcing the initiative’s start. Wyoming statute also calls for geographical diversity in the signatures – the initiative will need a significant number of signatures from two-thirds of Wyoming’s 23 counties.
The organizers believe they’ll build a diverse coalition – from coal miners who think wind energy gets unfair advantages under federal policy, to conservationists worried about land use and public education advocates who want more money for schools.
Like Case, initiative organizer and former member of the House of Representatives Jeb Steward said the wind energy companies should pay a severance tax just like the mining industries, because of the permanent impact of the industrial activity.
“It seems we have undersold the value of the Wyoming I love with such a small tax for the permanent, massive industrialization of our open space with these wind factories,” Steward wrote in a press release.
“We look at a wind production tax as a severance tax to compensate Wyoming for something we will never get back.”
Case chairs Senate Revenue
This year, Case moved from running the Senate Corporations, Elections and Political Subdivisions Committee to chairing the Senate Revenue Committee, of which he was previously a member.
At a Joint Revenue Committee Hearing on Feb. 25, he suggested a wind tax should be one of the committee’s study topics for the months preceding the next legislative session. The committee will submit a list of suggested study topics to the Legislative Management Council, which ultimately sets each committee’s interim study agenda.