Taxing wind

Legislature approves excise tax on wind

By JUSTIN PITTMAN
Reporter

Both houses of Wyoming’s legislature overwhelmingly approved what the Associated Press described as the nation’s first excise tax on wind energy, but a local Senator says a study that could accompany the bill carries the most significance.

The tax, imposed by House Bill 101, would charge wind energy producers $1 per megawatt hour of electricity generated from wind in Wyoming.

The Senate approved the proposed tax with a 29-1 vote Feb. 26 after the House passed the bill with a 40-18 vote Feb. 18. Two of Converse County’s three legislators voted in favor of the bill. Rep. Frank Peasley voted against it.

“The important part of all that legislation was the commitment to do an interim study along with it,” Senator Jim Anderon of Glenrock explained.

“I wasn’t necessarily in favor of taxation unless we’d done a thorough study,” Anderson added. “That actual tax mechanism will probably not be engaged until such time as a tax study can be conducted.”

Anderson described the bill as a “placeholder.” The tax would not become active until January 2012, and developers will not be charged until a turbine has produced energy for three years. Anderson estimated the period between the legislation’s passage and the tax’s activation would give legislators ample time to conduct a more thorough interim study and re-address the issue during a future session.

“To try to get simplified answers to this is really quite difficult,” Anderson said. “The bill that would pass is really just a framework.”

The possibility of new wind taxes has become riled in complex “nuances” created by issues like wind development’s inherently high start-up costs, the rapid depreciation in turbine value over time and the potential for three different taxes (property, electricity generation and sale of equipment) to affect the industry, Anderson said.

“(A comprehensive study) should bring an element of certainty to the counties in regard to what future revenue could be for them,” he said. “It would bring certainty to developers that are already in place and could have plans for further development.”

Anderson predicted that the Legislative Leadership Management Council might assign an interim study of the wind tax issue during a March 3 meeting. Anderson, senate majority floor leader, participates in the council and chaired a legislative task force on wind energy that originally recommended such a study.

“If they’re going to run around building wind mills we might as well be getting the leases,” Peasley said. “At least then the power companies aren’t going to say that the wind industry failed because we taxed them.”

Peasley had previously supported a wind excise tax, but said that numerous landowners in his district hope to profit by leasing their land to wind energy developers and have voiced concerns over the tax.

“Wyoming’s (potential) wind excise tax will become one of many factors to be considered when evaluating new generating resources in the future,” Rocky Mountain Power spokesman Jeff Hymas said.

Representatives from Duke Energy (which operates the Campbell Hill wind farm and has begun constructing a new wind farm outside of Rolling Hills) declined to comment until the tax becomes final. Officials from Wasatch Wind (which hopes to develop a wind energy facility in southern Converse County) were unavailable for comment.

This is part of the March 4, 2010 online edition of The Glenrock Independent.

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