Wyoming Gov. Matt Mead says it appears unlikely the Legislature will change new wind energy taxes

Source: BEN NEARY • Associated Press • Posted: Friday, January 27, 2012

CHEYENNE, Wyo. — Gov. Matt Mead says he’s given up hope that the Wyoming Legislature this year will roll back state tax increases on wind energy production and construction of wind energy projects.

Wyoming began imposing a $1 per megawatt hour tax on wind energy production in January. This month, the state also began imposing sales and use taxes that generally exceed 5 percent on equipment used on wind energy projects.

Mead has expressed concern that the higher taxes might make wind energy companies look outside Wyoming. Nonetheless, the Legislature’s Joint Revenue Interim Committee last fall rejected the governor’s proposal to continue the tax exemption for wind energy projects while imposing a lower 2 percent impact fee on wind projects to support county governments.

“The Revenue Committee didn’t see fit to move forward on that, and I’m disappointed on that,” Mead said this week in an interview with The Associated Press.

Several energy companies have warned that the higher taxes could hurt Wyoming’s ability to recruit new wind projects. Companies with existing wind farms in the state have also say it’s unfair for the state to impose the wind generation tax after they’ve invested in plant construction.

Mead said this winter that he was hopeful the Legislature would roll back the tax increases in the session that starts next month. However, he now says there’s been no movement on the issue.

“We’re not going to get that done this session, but I’m committed to continuing to work with the Legislature to hopefully get something done next session that provides what I think is a good opportunities for money for counties and money for the state of Wyoming,” Mead said.

Mead said he believes the discussion on wind turbines has been too narrow, focusing on them only as generating wind power. He said large wind projects can also require supplemental natural gas generators that could increase the market for Wyoming gas in the state.

“So as we look at the abundance of natural gas we have, the incredible amounts that are being stored now, that seems like a way for us not just to ship out our natural gas but actually using it in Wyoming,” Mead said.

Harnessing Wyoming’s abundant wind resources together with natural gas would allow the state to market more energy to California, which demands clean energy.

Sen. Cale Case, R-Lander, is a member of the Revenue Committee and opposed Mead’s call to roll back the tax increases last fall.

Case said Thursday he hasn’t heard that any lawmakers are interested in trying to roll back the taxes in the coming legislative session. It would take a two-thirds vote of lawmakers to bring up the issue in the budget session.

Case said he expects wind companies and their legislative allies may want to wait until next year’s general session, when it wouldn’t require the two-thirds vote to consider the issue. “We can kind of see how things go this year with the tax in place, and I don’t think the world’s going to fall apart,” he said.

Case, an economist, said the state wind taxes aren’t the determining factor in whether energy companies build new wind farms in the state.

Rather, Case said companies are nervously watching whether Congress extends the production tax credit, a federal incentive that helps offset the cost of electricity production during a wind farm’s first 10 years of operation. The credit will expire at the end of this year unless Congress passes an extension.

“I’m not quite sure what is going to happen there,” Case said of the tax credit. “I actually can’t imagine that’s not going to go through eventually. The global warming discussions aren’t going to go away, whether you believe it or not. The emphasis on carbon’s not going to go away. California’s not going to go away.”