November 24, 2020
Wyoming

Revenue committee weighs hiking Wyoming’s wind energy tax

Camille Erickson | Casper Star Tribune | Nov 24, 2020 | trib.com

Wyoming lawmakers charged with finding new revenue sources for the state will draft a last-minute bill to increase the tax on electricity generated from wind turbines in the state.

Rep. Timothy Hallinan, R-Gillette, plans to present a bill draft at an upcoming Joint Revenue Committee meeting scheduled for Dec. 17-18, according to comments made Friday.

The proposed legislation could double the state’s wind generation tax. As it stands, Wyoming already charges a $1 per megawatt hour electricity tax on wind facilities after three years of operation.

State lawmakers have long debated the feasibility of beefing up taxation on wind. The topic of wind energy taxation came up again at the Joint Revenue Committee on Friday as the Legislature searches for ways to drum up more revenue.

Proponents of reforming Wyoming’s wind taxes argue the state doesn’t charge enough for developers. The extra revenue, moreover, would be good for the state at a time when it faces a multi-million shortfall.

Generation taxes from wind energy bring in about $4.2 million a year, with $2.5 million of that amount routed back to counties based on the assessed value where the electricity was generated, according to Director of Department of Revenue Dan Noble. The remaining amount goes to the state’s general fund.

According to research published by the University of Wyoming’s Center for Energy Economics and Public Policy in March 2019, Wyoming already requires wind developers to pay more in taxes than several other Western states.

The study levelized the tax costs per megawatt hour across a dozen states. The analysis found the estimated tax burden for Wyoming wind developers per megawatt hour of electricity produced fell between $3.05 and $4.21.

Many other states offer more competitive rates. In comparison, Colorado’s tax burden came out to $1.57 per megawatt hour.

But some lawmakers are still skeptical that hiking the generation tax by $1 per megawatt hour would actually deter companies from continuing to build wind farms in the state.

“I wonder why people here are so convinced that raising this tax by $1 will cause us to lose all these businesses to our state,” Hallinan, the representative from Gillette, said on Friday. “I don’t think it’s very likely, and I wonder why so many of you people think that it is.”

Back in August, Hallinan said he supported increasing the electricity generation tax levied on wind developers. Sen. Cale Case, R-Lander, encouraged him to draft a bill.

“The last I heard was that (Legislative Service Office) had a copy of it,” Hallinan said Friday. “It thought it was going to be brought up at this meeting. But it’s not there. So I guess we’ll have to have it dealt with next meeting.”

According to Case, the bill will be discussed at the December committee meeting.

Members of the public who offered comments during Friday afternoon’s meeting came prepared to oppose the draft bill increasing the wind tax. Many said doing so would drive out industry or make Wyoming too costly for new development to take place. What’s more, several individuals providing comments expressed confusion that a discussion on the bill had been pushed to December.

At an Aug. 25 committee meeting, Case told Hallinan: “We’ll give you time at the next meeting to present that request.”

The forthcoming tax bill draft comes on the heels of Wyoming’s Joint Committee on Corporations, Elections and Political Subdivisions narrowly voting to advance a bill that would eliminate the three-year grace period from the $1 per megawatt hour electricity tax now available to wind facilities.

The renewed possibility of changes to wind energy regulations has sparked concern among the state’s utility companies, independent power producers and other renewable energy supporters. Many say the exemption repeal would hike costs for consumers, create regulatory barriers and severely deter renewable energy investment in the state.