CHEYENNE – Wyoming lawmakers killed a pair of bills to increase the tax burden on companies generating electricity from solar or wind energy.
Members of the Legislature’s House Revenue Committee voted to not advance two renewable energy tax bills to the House floor on Thursday.
Public testimony provided over two days showed the tricky balance between collecting enough revenue from big industry for state services while not driving companies away.
The first bill, House Bill 94, would have levied a $1 tax on each megawatt hour of electricity produced from larger solar energy facilities in the Equality State. The tax sought to mirror a tax already exacted on wind energy facilities.
“I just feel like it’s an equity issue,” said Rep. Albert Sommers, R-Pinedale, the sponsor of the solar bill. “Because I do think we are missing out in the state of Wyoming in getting revenue generated from those nontraditional (energy sources). I think it is important that these industries pitch in.”
The second, House Bill 108, would have increased the state’s existing wind generation tax by 100% and eliminated an existing three-year tax exemption for new projects. As it stands, Wyoming already charges a $1 per megawatt hour electricity tax on wind facilities after three years of operation. Renewable energy generators already pay sales and use taxes, as well as property taxes, in Wyoming.
Rep. Timothy Hallinan, R-Gillette, sponsored the wind tax bill. He argued the state doesn’t charge enough for renewable energy developers. The extra revenue, moreover, would be good for the state at a time when it faces a multimillion-dollar shortfall. He pitched the bill at a Joint Revenue Committee meeting last year but failed to gain sufficient votes for committee sponsorship.
The current wind generation tax generates a little over $4 million a year, according to Department of Revenue Director Dan Noble.
The possibility of changes to solar or wind energy tax policies have generated concern throughout the state’s utility companies, independent power producers and several county and town officials. Many say increasing the tax burdens would severely deter future renewable energy investment in the state, at a time when once-stable revenues from fossil fuel production have declined.
The majority of public testimony before the committee cautioned members against instituting additional taxes on either wind or solar energy, saying the higher fees would simply make the cost of doing business in Wyoming uncompetitive.
Developers reiterated the need for a more stable business environment.
According to Ryan Fitzpatrick, a representative of renewable energy firm NextEra Energy, more taxes would likely result in Wyoming receiving less revenue in the long term.
“Increasing taxes now, during a time when several neighboring states with similar wind and superior solar resources are competing for renewable projects, certainly risks Wyoming losing out on hundreds of millions of dollars in future tax revenue,” Fitzpatrick said.
“For every incremental increase that we add to solar and wind projects, it just makes it less competitive,” he added.
That said, some Wyoming residents came out in adamant support of the bills, arguing renewable energy firms could afford to take on the extra cost.
For years, state lawmakers have debated the possibility of imposing more taxes on wind.
Though members defeated the two tax bills discussed Thursday, other attempts to change the tax rates remain.
Another piece of legislation proposed, House Bill 28, would eliminate the three-year grace period from the $1 per megawatt hour electricity tax now available to wind facilities, but keep the tax rate the same.
The bill has not been assigned to a committee.
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