Wyoming is known for its wind. Gusts regularly pummel the state’s high plains at 50 mph or even 60 mph, yet few think of wind as one of the state’s precious energy resources.
Right now, it’s just a small piece of Wyoming’s revenue picture. But as the cost to develop wind farms drops and interest from developers nationwide rises, some wonder if those developers should pay more into the long-term health of the state’s economy.
After all, Wyoming is not just a windy state but an industry one, which is why two lawmakers are hoping the state can profit just a bit more from the resource.
Rep. Scott Clem, R-Gillette, and Sen. Cale Case, R-Lander, plan to file a bill increasing the state’s wind tax from $1 to $5, or a half a penny per kilowatt hour, when lawmakers meet in Cheyenne this month.
Increasing the state’s wind generation tax has been a contentious topic. It failed to gain support from lawmakers over the interim, but Case and Clem remain confident.
“I feel like we owe it to future generations, because we are making decisions right now about the Wyoming that they’ll experience in 100 years,” said Case, who believes the detriment of wind farms to the Wyoming landscape calls for compensation.
The proposed increase is $2 more than the one lawmakers considered during a six-hour session in September with the Joint Revenue Committee. There was an even consensus to abandon the idea after that meeting, as many argued it would hurt business and revenue more than it would help.
“I think our viewshed is important,” he said “We don’t have a right to make those decisions for future generations without at least thinking about them in the equation.”
Most wind farms developed now will be serving customers outside the state, as Wyoming’s electricity demand is met for the foreseeable future. That, too, is a problem for Case.
“I look at 100 percent of the impact and zero percent of the benefit from the energy,” he said.
However, opponents say Wyoming has nothing to gain and everything to lose in increasing the tax. Wyoming is the only state that charges wind developers for generation, in addition to property and sales and use taxes.
An increase in taxes will make Wyoming less competitive and derail projects in development, some say.
“If the projects don’t go forward, then an increase in the wind tax will have accomplished nothing. What Wyoming stands to lose is significant,” said Roxane Perruso, the vice president and general counsel for Power Company of Wyoming.
PCW is developing the Chokecherry and Sierra Madre project in Carbon County, a 1,000-turbine proposal in the final stages of permitting.
As an example of what a large project contributes, Perruso said termination of Chokecherry would cost Wyoming $800 million in lost taxes over the next 20 years.
“Utility companies who need more renewable energy could buy from any number of states and any number of projects across the West,” said Kara Choquette, spokeswoman for the company. “They don’t have to come to Wyoming … Are they really going to pay for Wyoming wind if it costs that much more than anything else that’s available?”
Others agree with the developers. The Carbon County Economic Development Corporation and the Wyoming Taxpayers Association do not support the tax.
In a study from the University of Wyoming Center for Energy Economics and Public Policy, economists found that Wyoming wind policies are partially responsible for a decline in wind development since 2010. The generation tax was passed in 2010, implemented in 2012.
Of 11 states on the same electricity grid, Wyoming is the only one to have a negative growth in wind developments over the last seven years, according to the study.
For Sen. Ogden Driskill, the September testimony from developers like Rocky Mountain Power, TransAlta and Power Company of Wyoming changed his view on a tax increase.
“I really feel like wind is a resource similar to our other resources and it should be taxed,” he said. “But it needs to be taxed in such a way that we’re not killing industry doing it.”
Wind energy is growing, and if there is a place for it in Wyoming as a business, the government needs to allow for that, he said.
“It’s really important that we are somewhere near the front end and we establish a clear set of rules so the industry is able to react to that set of rules and make their business models accordingly,” he added.
For Case, the issue is about preparing for the future, too, by making sure that changes to Wyoming are compensated for and that the wind industry pays a fair share.