Wyoming lawmakers to consider raising the only US state tax on wind generation

Dive Brief:

The Wyoming legislature’s Joint Revenue Committee will consider increasing the only state tax on wind-generated electricity during its meeting on May 11 and 12. The current $1/MWh production tax brought in $3.8 million last year and any increased revenue would go toward covering the state's budget shortfall.
Though the size of the hike has yet to be considered, Rep. Michael Madden, co-chair of the Revenue Committee, told Wyoming Public Media he wants wind producers to pay comparable tax rates to oil and gas developers.
The Power Company of Wyoming (PCW), which is planning North America’s largest wind project in the state, filed comments with the committee arguing a tax increase on wind generation would put the state’s developers at a disadvantage to producers in neighboring states.

Dive Insight:

Though the Wyoming production tax on wind energy is $1/MWh on the books, PCW parent company Anschutz Corp. argues its effective tax rate is much higher.

Accounting for property, sales and use taxes, PCW's Chokecherry project will end up paying about $4.76/MWh of generation, the company wrote in a letter to Revenue Committee members this week. Of that, $3.91/MWh come from Wyoming state taxes, a rate Anschutz says is higher than those paid by fossil fuel generators.

"The Wyoming-based taxes paid by wind of $3.91/MWh exceed those for coal and gas of $0.95/MWh to $2.32/MWh," the company wrote.

Despite the taxes, developers continue work in Wyoming, a state blessed with abundant wind resources. PCW is pursuing permits for its proposed 3,000 MW Chokecherry and Sierra Madre Wind Energy Project, which would be the largest wind generation project on the continent by capacity. Pathfinder Renewable Wind Energy, another developer, is working on permits for a separate 2,100 MW project.

Anschutz is also the parent of TransWest Express LLC, a development company seeking to build transmission connecting Wyoming wind resources to the California electricity market. A National Renewable Energy Laboratory study from 2014 estimated such a project could result in $1.62 to $3.62 in benefits for every dollar invested.

Correction: An earlier version of this article indicated that Pathfinder is part of the group of companies working on the TransWest line. That was incorrect. TransWest is a wholly-owned affiliate of Anschutz.