Potential wind tax increase sees additional pushback 

By Mathew McKay

mmckay@rawlinstimes.com

RAWLINS — Not much has changed on either side regarding proposed increases to wind generation taxes in Wyoming.

While the Carbon County Commissioners stand by the need to eliminate any extra tax on wind energy, the state Joint Revenue Committee stands by its research and idea of keeping things fair for all energy companies dealing with taxes.

But something that has changed is the number of cities and counties that have spoken up. Since the Commissioners passed their resolution in late July, the Albany County Commissioners, as well Laramie and Hanna councils, have also approved similar resolutions.

The show of support from local governments is a stance against the Committee’s decision to direct the Legislative Service Office to draft two bills that would increase taxes on wind.

One bill would seek to increase the current tax of $1 per megawatt hour of wind produced in Wyoming with the second bill requiring wind companies to provide a portion of the federal Production Tax Credits they receive. Some reports have set that amount around as much as $12 per megawatt hour.

That could be a potential fatal blow for Power Company of Wyoming’s Chokecherry and Sierra Madre Wind Energy Project, a $5 billion project nearly a decade in the works set to be the largest such project on the planet.

Albany County Commissioner Tim Chesnut said the option of increasing the wind power tax is way out of line.

“While it is expensive right now, it is the future,” he said of wind energy.

Chesnut said it was an easy decision to pass the resolution after having organizations such as Power of Wyoming speak to the group of Albany County.

“This is an aggressive tax,” He said. “No other state is doing this. This is going to kill the industry.”

Even though Wyoming would be the only state with such a tax, Rep. Michael Madden, R-Buffalo, said it doesn’t make it wrong.

“Wyoming does not pick favorites,” Madden, the chairman of the Joint Revenue Committee, said. “Just because we are the only ones that do it, I guess you could say we are the only ones doing it right.”

Madden claimed that while the federal government tends to pick favorites and tax those who don’t fit that category, Wyoming couldn’t do the same.

“We want to treat all sources of electric generated sources equal when it comes to the tax policy,” he said.

Chesnut said the biggest action legislators opposed to the tax could take leading up to the Committee’s Sept. 22-23 meeting in Buffalo is to continue trying to show the legislators across the state what is at stake and why it is the wrong to add to the tax

“It seems as though it is the legislators in counties that have oil and gas that are holding onto it for dear life, even though we need wind energy and solar energy.”

Kara Choquette, Power Company of Wyoming’s director of communications, said this wouldn’t be the first time numbers have changed on the company and that the further increase in tax would have an effect.

“When we started the project, all we had to pay was property taxes which is about $377 million,” she said. “ Then the sales and exemption taxes went away. So they added another $232 million.”

Choquette said while any tax would have an effect, she wasn’t sure what that extent was — that all comes down to the market.

“If we want to try to sell our product into the renewable market, we have to be competitive,” she said. “And we have to offer our product at a competitive price. So not knowing a price of our product could change and create a lot of uncertainty.”

Roxane Perruso, PCW’s vice president and general counsel, said in mid-July that any increase could potentially kill or delay the construction of the company’s proposed project to be located south of Rawlins.

Choquette said despite the questions at hand, PCW still plans to start construction at in December and will mainly keep an eye on how things shake out.

All things considered, Chesnut said that throughout the entire process, PCW has done nothing but try to help the state and believes it is yet another reason why there should be zero question for legislators.

“PCW has done everything it needs to do to, bend over forward and backwards, to solve the environmental problems and to solve the other problems people were having,” he said.

The wind energy project stands to be a major economic factor for Carbon County and the state of Wyoming, PCW numbers show.

PCW figures show the wind project paying $106.4 million in property taxes over eight construction years and $271.1 million over 20 operation years; as well as, $232.4 million to sales and use taxes over eight years of construction and $170.6 million over 20 operation years. Combined, those total to $780.5 million.

Of the $232.4 million in sales and use tax, 53 percent — around $123 million — will stay in Carbon County. The remainder heads to the state’s general fund ($106.9 million) and other counties in the state, like Albany, Natrona and Sweetwater.

Carbon County and Rawlins currently both stand to gain more than $49 million from the $232.4 million, with every other town getting a share. Each town in the county is set to get more than $1 million except Dixon and Riverside, which are estimated to receive $515,000 and $276,000, respectively. The big winner outside Rawlins is Saratoga, estimated to receive $8.9 million.

One Response to Potential wind tax increase sees additional pushback 

  1. Pat Lynch August 20, 2016 at 3:06 pm

    Increasing taxes on a fledgling, risky business would not be wise.

    Reply

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