CHEYENNE – If lawmakers in Wyoming are to consider a wind energy tax increase in 2018, it won’t come from the Wyoming Legislature’s Joint Revenue Committee.
That committee killed a motion to reintroduce a proposal that would increase taxes on wind energy production in the state on Tuesday.
Leading up to that decision, Sen. Cale Case, R-Lander, had moved to reconsider his previously struck down proposal to increase the wind tax by 400 percent, from $1 per megawatt hour to $5.
Wyoming is home to one of the best on-shore wind resource locations in the U.S., and economists estimate revenue potential for investment at around $10 billion in coming years. It could be a game changer for places such as Carbon County, where developers have massive wind farm plans in the works. And while developers and others argue increased taxes on wind energy production could drive away investment, Case said Tuesday he’s not buying it.
Given the placement of power grids in the eastern and western U.S., Case said Wyoming is uniquely situated to yield the best wind energy product for customers in western states. As more transmission infrastructure becomes available, he argued Wyoming would be irresistible to developers. Additionally, Wyoming doesn’t have a corporate income tax, so Case said the state would still have a more appealing tax climate for investors with his proposed increase.
Though the state’s revenue picture has improved in 2017, Wyoming is still struggling through its latest economic downturn tied to the mineral industries. Those industries account for around 70 percent of its revenue, resulting in a repeating boom-and-bust cycle. Because of how the state taxes mineral exports, Wyoming taxpayers receive a disproportionate level of services to their own burden.
Case said the wind production tax would work much in the same way, where the burden would be passed to customers out of state. The committee punted on unpopular sales and property tax proposals Monday, so it stands to reason it could be an appealing argument.
“That’s why we need to put this tax back on the table and have it be considered,” Case said. “This exhausting interim, Mr. Chairman, where we’ve killed proposals or kicked the can down the road and not allowed this to be on table to be debated for the people of Wyoming, it would be a mistake.”
But it just wasn’t enough for the committee’s support, as a vast majority voted against the motion to reconsider. In just less than 15 minutes, it was over.
Roxane Perruso, vice president and general counsel for Power Company of Wyoming LLC, said she was pleased with the committee’s vote. Power Company of Wyoming LLC is the developer of the Chokecherry and Sierra Madre Wind Energy Project. Kara Choquette, communications director for Power Company of Wyoming, cited an estimated $846.5 million in Wyoming property taxes, sales and use taxes and generation taxes over the Choke Cherry and Sierra Madre project’s initial economic life of 20 years.
“That’s an average of $42 million a year,” she said. “The wind project also will bring important new employment opportunities, development of a rail facility in Carbon County, economic diversification for Wyoming and other related benefits.”
With wind projects in motion in the state, Sen. Affie Ellis, R-Cheyenne, said she was concerned about how a tax increase could affect those developments.
“A lot of counties – particularly Carbon County – are relying on the jobs that will flow from those projects moving forward,” she said. “I’m just really concerned how that would affect projects that are in the works.”
Ellis said she doesn’t love looking at windmills in Wyoming’s viewsheds and doesn’t expect the state will move on from its breadbasket mineral commodities. However, with an ever-increasing demand for energy, she said she sees wind as a part of the state’s portfolio.
Case said he wasn’t surprised with how the vote turned out Tuesday. Though he wished the committee’s co-chairmen would have allowed for public comment, Case said he understood why they didn’t want to get bogged down in lengthy discussions about a bill lawmakers previously voted to strike down.
“Was it unexpected? Eh,” Case shrugged. “Sure, I would have loved it to pass, but I’m in this for the really long haul, and you know that.”
For Case, the long haul involves making sure the bill is introduced in the House – all revenue raising measures must come from the House – during the 2018 session. If it fails the two-thirds vote it needs for the Legislature’s consideration, Case said he plans to begin work on a citizen’s initiative that could bring the wind tax to a ballot.
The always optimistic Case said he was still feeling good about his proposal even after the failed vote. He said he feels momentum building as he’s able to educate lawmakers and citizens about his reasoning for the tax.
“People hearing it for the first time are looking at it differently,” Case said.