Can Wyoming get out of its own way in courting renewables? – Wyoming Tribune

Wyoming wind energy proponents dodged a bullet when a legislative committee shot down yet another proposal to increase taxes on the industry.

But some are worried that having a tax debate about renewable energy year after year is taking its toll on wind projects and harming the industrys chances of capitalizing on a robust 2020. It may not matter if any of these repeated broadsides actually land; the uncertainty alone can scare off investors and eliminate the states chance to thrive.

I dont think its necessarily a case of direct assault on wind power in Wyoming. Its more like a steady drumbeat of opposition led by two groups with divergent interests one that genuinely wants equity in taxes on renewable resources and fossil fuels, and a second simply unwilling or unable to accept the end of coals glory days.

The first scenario leads to a fundamental problem, because tax parity cant exist for industries that use such different resources to generate electricity. How does a state assign equal values to a finite product like coal when its ripped from the ground, and an infinite one like wind that must be captured as it blows across our landscape for it to have any value?

The traditional apples-to-apples comparisons dont exist for wind and coal. The challenge for legislators, then, is to create policies that will allow an industry like wind to compete without being taxed out of existence.

For lawmakers intent on propping up the coal industry at all costs, it doesnt matter whether the competition comes from wind, solar, battery storage or some Earth-saving, peace-love-and-harmony inducing miracle energy technology from outer space. If coal doesnt win, these legislators think everyone in the state loses. They are true believers, frustrated that an industry that has brought so much revenue to Wyoming is the victim of what they view as environmental political correctness.

By a 7-2 vote, the House Revenue Committee killed House Bill 108-Wind energy production tax. The measure would have doubled the wind tax adding $1 per megawatt hour to the $1 per MW hour that has been enforced since the state began taxing wind generation in 2009.

HB 108 would have also repealed the three-year tax exemption on power generation once a project goes online now in effect.

Attorney Matt Micheli, former chair of the Wyoming Republican Party, has represented both coal and wind interests. He testified against HB 108, in part because Micheli realizes that raising taxes on any industry does not guarantee more revenue to state or local governments.

In 2010, Micheli recalled, Wyoming had 30 industrial wind farms on the drawing boards. Zero were built after the wind generation tax went into effect.

The industry struggled until last year, when Wyomings online wind capacity statewide increased by nearly 1,000 megawatts. That is second only to Texas in new construction.

Now we have $10 billion worth of wind projects that are once again in the pipeline, ready to come to this state, Micheli said. Were hearing [legislators make] the same arguments from more than a decade ago well get more revenue if we put another dollar [wind generation tax] on top of these contracts.

Randy Fitzpatrick of NextEra Energy Resources said in the highly competitive world of renewable energy, the difference between winning or losing a contract often comes down to pennies per megawatt hour.

Wyoming lost aNextEra project to Colorado over a mere 40 cents per MW hour, Fitzpatrick said. Doubling the current $1 per MW hour tax means Wyoming wind companies might as well just close up shop.

Wyoming is the only state in the nation that requires the wind industry to pay three forms of taxes, Micheli noted: on electricity generation, sales and property. If all of the states wind projects come to fruition, he said, it would mean almost $1.5 billion in state tax revenue over the next 20 years.

But a 100% increase in the wind generation tax that renders Wyoming unappealing would result in no new tax revenue, period.

If we force these projects to other states, where is that money going to come from? Micheli asked. I dont want to increase sales taxes and property taxes. I dont want an income tax.

Wyoming Business Alliance President Cindy DeLancey also testified against HB 108. This is where our money is going to come from, she said of wind energy. Were at a point where we are thinking about our revenue challenges, how we broaden our tax base [Instead of] adding additional barriers to produce non-mineral revenue, we need to be opening our doors.

Indeed, Wyomings major energy competitors, including Colorado and Utah, have paved the way for their success by offering property tax abatements and sales tax exemptions for wind projects.

Micheli asked if Wyoming legislators will be able to resist making the kind of harmful tax decisions that have hampered the growth of the states wind industry until now.

Their vote proved they are able. Thats good news, but the state is lagging. Voters should ask why Wyoming is still having this conversation in 2021.

Veteran Wyoming journalist Kerry Drake has covered Wyoming for more than four decades, previously as a reporter and editor for the Wyoming Tribune Eagle and Casper Star-Tribune. He lives in Cheyenne and can be reached at kerry.drake33@yahoo.com.

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Can Wyoming get out of its own way in courting renewables? - Wyoming Tribune