Increased wind taxes are a bad joke
By Chad Abshire
Daily Times editor
A pair of bills pitched by Wyoming Legislature’s Joint Revenue Interim Committee to increase taxes on wind generation left us scratching our heads.
We still can’t figure out how two bills got the support to progress through the committee — one that flatly increases the current tax on wind and the other that would require companies to provide a portion of the federal Production Tax Credits they receive.
Either way, it’s a bad joke — one that could potentially kill a $5 billion (which looks like $5,000,000,000 when written out) investment for Carbon County — Power Company of Wyoming’s Chokecherry and Sierra Madre Wind Energy Project. That’s a lot of zeroes and represents a major win for not only Carbon County, but also the state and every town and county across it.
This is either our lawmakers basing a decision on poor information or the worst case of legislative greed that we’ve seen in a while.
Wyoming already has all of its eggs in the proverbial energy basket and the bottom has dropped out. Coal is in its worst spot in years, not to mention the federal government’s moratorium halting new coal leases, and oil and natural gas are still reeling from having its prices plummet.
We’re flummoxed as to why some lawmakers insist on stuffing wind into the same basket when they could instead get a second basket altogether. Wyoming needs to diversify its economy and here’s one of the best ways to do so.
Take a look at the numbers.
In 2015, more than $3.7 million in taxes was generated statewide. Six wind producing counties: Albany, Carbon, Converse, Laramie, Natrona and Uinta shared in more than $2.2 million, with the state’s portion of the revenue at slightly more than $1.5 million.
Carbon County can become the top wind-producing county in the state and increase those figures even more when (or rather if in this case) the biggest wind farm on the planet becomes reality just a few miles south of Rawlins.
And we don’t think it’s a veiled threat meant to stir the pot when PCW’s vice president and general council, Roxane Perusso, says it could potentially kill the whole project instead of just delaying its construction.
Here’s what Wyoming stands to lose if lawmakers who sit on the revenue committee like Sen. Ogden Driskill, R-Devils Tower, get their way. Keep in mind that Driskill reportedly said something along the lines of “if it kills a project, it kills a project” in regards to increasing taxes.
Wyoming’s current tax regime encouraged development of wind projects by exempting renewable energy projects from sales and use tax, thus making CCSM’s taxes around $232.4 million.
At the current rate of $1 per paid megawatt hour of wind produced, CCSM is estimated to pay $10.5 million in wind generation taxes annually after three years of turbine production — about $170.6 million during its initial 20-year lifespan.
But those proposed tax code changes increase the project’s tax burden by approximately $403 million, putting PCW expected to pay around $780.5 million in taxes during its project’s initial economic life.
More than half of the revenue based off current tax codes will go directly to Carbon County and its incorporated cities and towns, with roughly 40 percent of the remaining money will flow into state coffers — that’s about $92,960,000 for the state.
In the realm of funding a state government, it’s not an overwhelming amount of money but it’s nothing to sneeze at, especially when the state is struggling so mightily in its wallet. Consider the $36 million cut to education the Legislature approved — that led Sinclair Elementary to closure.
What is an overwhelming amount is the $73.2 million in taxes will go to the Wyoming State Foundation (state schools fund) based on the 2013 Carbon County mill levy — that’s about three new schools built courtesy of CCSM going off the $26.5 million new Rawlins High School.
The remaining dollars would head to the county and local schools and community organizations such as the library, museum and Memorial Hospital of Carbon County — all of which are facing steep budget cuts currently as a result of the state’s lack of diversification in its economy.
We stand against these new tax changes and in solidarity with our elected officials who have weighed in on the matter and applaud Rawlins City Council in drafting a resolution to send to the Wyoming Association of Municipalities that wind taxes should not be altered.
Lawmakers should be happy to get what they’re getting. The CCSM wind project won’t solve the state’s economic problems immediately, but it will certainly put Wyoming in a great direction to do so.