By Heather Richards
Via Wyoming News Exchange
CASPER — A group organized by a Wyoming senator plans to quintuple Wyoming’s wind tax in an unusual way — by a vote of the people.
Wyoming has a unique tax on wind energy production; just one other state levies a fee on wind power. A few lawmakers, like Sen. Cale Case, R-Lander, have pressed for an increase to that tax for years, arguing that it fails to compensate for what’s lost in Wyoming: an unmolested landscape.
Industry supporters say wind is an economic boon and shouldn’t be stymied with taxes, while developers say the tax increase proposed year after year would break the favorable economics of Wyoming wind. That argument has held back lawmakers for some time, despite the efforts of Case and others.
Now the issue may go to the voters of Wyoming.
On Tuesday, Wind Wyoming’s Way – a small group organized by Case that includes a rancher and a former representative, announced that it would try to collect the 30,792 signatures required to place a $4 per megawatt hour increase on Wyoming’s unique wind energy tax on the ballot in 2020.
There’s a “silent majority” of Wyomingites who want the tax increased, said Jeb Steward of Wind Wyoming’s Way, who served in the Wyoming House of Representative from 2007 to 2013.
Citizen ballots initiatives are uncommon in Wyoming, certainly when compared to the bevy of such initiatives in states like Colorado, said Will Dinneen, spokesman for the Wyoming Secretary of State’s Office.
That may be due to the “high hurdle” in Wyoming to get a petition approved for the ballot, he said.
In addition to needing more than 30,000 signatures — 15 percent of the most recent election’s voter turnout — Wind Wyoming’s Way will need to get its petition signed in two-thirds of Wyoming counties. The geographical balance requirement was born in a constitutional amendment lawmakers passed in 1997.
It’s not enough in the Cowboy State to collect your signatures for a ballot initiative in the population centers like Casper or Cheyenne — you have to harness broad support.
Lawmakers have tried and failed to increase Wyoming’s wind tax four times. First instituted in 2010 — with the weight of then Gov. Dave Freudenthal — the wind tax was meant to counteract some of the negative attributes of having steel towers on the landscape and force the industry to pay a greater share into the common economic good of Wyoming like its mining counterparts do.
Freudenthal said in a recent interview with the Star-Tribune that though he supported a higher wind tax initially, he does not believe that raising it now would be prudent. The former governor said his problem with wind energy was you never see a parking lot for employees next to a wind farm — alluding to the low manpower it takes to run a wind farm compared to some other industries, like mining.
But that’s not to say wind farms don’t contribute to local economies. Local governments in Wyoming’s windiest areas are hesitant to do anything that would scare away development and often lobby against an increase to the tax.
Some of Wyoming’s best wind whips through Carbon County, where officials recently asked lawmakers to reject Case’s 2019 bill to increase the wind tax to $5 per megawatt hour.
In addition to property and wind energy taxes that will flow into the county at some point, the Chokecherry Sierra Madre wind project will pay about $6 million a year in local assistance dollars – required compensation for large industrial projects in the state.
Recipients of those dollars – such as Hanna, Elk Mountain and Encampment – also signed the initiative to reject Case’s wind tax increase.
Encampment Mayor Greg Salisbury said Wyomingites are torn on wind development.
Some see its benefits, he said. Salisbury, a natural gas pipeline inspector, said you have to consider the related jobs, from construction and maintenance to transmission and power plants. Wind development is connected to a larger system of economic development, he said. Like oil and gas infrastructure, where wells are pumped until they have nothing left to offer and are then reclaimed, wind farms can provide energy, revenue and jobs and then be properly dismantled, he said.
But there’s the other side, and it’s one he understands too. People enjoy the open landscapes of Wyoming, Salisbury said.
Though opposed to the wind tax increase, Salisbury said the ballot initiative could be a good way to address the issue. It puts the onus on the organizers to make their case to the people of Wyoming.
“That’s the best way to find out if people want it or not,” he said.
For supporters of a tax increase, like Case and Steward, Wyoming’s wind is good enough that increasing the tax won’t damage a developer’s bottom line. They also point to federal subsidies that have lifted wind’s profits for many years. The tax credit for wind sunsets at the end of this year for new projects, though many in development will retain some degree of federal subsidy for up to 10 years.
Wind developers in Wyoming strongly disagree that the tax won’t have a negative impact. They have made that case repeatedly before the Legislature, from the Venezuelan firm Viridis Eolia – that’s proposed an 800-turbine project outside Medicine Bow – to the Chokecherry Sierra Madre farm in construction south of Rawlins.
“The increase in taxes will prevent future wind energy development from going forward and will cause the cancellation of current wind energy projects, along with the transmission infrastructure being built to connect Wyoming to the market,” said Bill Miller, CEO of the Power Company of Wyoming, Chokecherry’s developer, in an email.
Miller is also a longtime oil and gas landman for Anschutz – the wind company’s parent firm. The Chokecherry project, first proposed about a decade ago, is tied to a transmission line to carry the Wyoming wind to markets in the southwest. The transmission line is in development.
It’s not just a question of developers coming to Wyoming, Miller wrote of the tax increase’s impacts. It’s a question of who will buy Wyoming wind if a tax makes it more expensive.
“The western renewable energy markets are extremely competitive and citizens in other states have a choice when deciding where to purchase renewable energy,” he said.
Steward, the former representative who lives in Encampment, said most people share his opinion on wind development.
He recalled working on wind issues immediately after his election to the House in 2007. It was around this time that Wyoming had what ended up being a wind boom – responsible for many of the large wind farms in Wyoming today.
Steward recalls Freudenthal, then the governor, describing a map of proposed transmission and wind generation in Wyoming as spaghetti thrown at the wall. It was a mess and a tangle, he said
Changes came out of that wind boom, like the wind tax and industrial siting reviews of wind projects – which guarantee the local impact payments during construction. But Steward says Wyoming settled too low when it decided on the tax.
“We needed a throttle,” he said of trying to contain the wind industry’s growth at the time.
Now that Wyoming is facing another boom in wind development, a bigger one than before, it needs to reconsider the one leftover from the first boom that falls short of its purpose, he said.
“I feel like we’ve undersold the value of Wyoming,” he said. “It’s like selling a $100,000 house for $10,000.”