Wyoming wind tax collections fall by 15 percent

Source: By Benjamin Storrow, The Billings Gazette • Posted: Wednesday, March 30, 2016

LANDER, Wyo. — Wyoming wind revenues fell by 15 percent in 2015, an unwelcome drop at a time when the the state is already suffering the effects of a pronounced downturn in the oil, natural gas and coal sectors.

The Cowboy State became the first in the nation to tax wind production when it passed a $1-per-megawatt-hour tax in 2010. Tax collections have bounced around ever since, rising from $2.6 million in 2012 — the first year the levy was imposed — to $4.4 million in 2014. Last year, the state collected $3.7 million.

Wyoming’s wind production capacity has remained unchanged over that time. No new wind farms have come online since 2010, when turbines began turning at Duke Energy’s Top of the World facility outside Glenrock. A lack of transmission capacity has stymied further development in the state.

The reason for the 2015 tax decline was not immediately apparent.

Utilities nationwide installed more wind power in 2015 than any other fuel source, or about 41 percent of all U.S. electricity production additions. Renewables also account for a greater share of American power generation, with 8 percent of electricity production expected to come from sources like wind and solar in 2016.

Robert Godby, a professor who studies power markets at the University of Wyoming, said no wider market trends explain the state’s tax decrease.

“I think the only thing we can take from this, based on the last three years of data, is it is a small revenue stream, but it has its own volatility,” Godby said.

Indeed, wind revenues represent a fraction of the money Wyoming collects from the energy sector. Coal revenues, for instance, annually contribute roughly $1 billion to the state’s coffers.

But the decrease in wind dollars comes at a time when the state has seen its income from traditional fossil fuel industries dwindle. Wyoming is facing a projected revenue shortfall of $477 million over the next two years, largely because of the slowdown in the oil, natural gas and coal sectors.

Converse County led the state in terms of wind tax collections in 2015. Wind farms in the county generated $1.6 million in tax revenues, followed by Carbon County ($758,794), Uinta County ($731,485) and Albany County ($345,969).

Natrona County recorded the biggest year-over-year decrease in percentage terms, with wind revenues falling 25 percent from $129,522 in 2014 to $96,667 last year. Albany and Carbon counties each saw their revenues drop by 22 percent.

Rick Grant, chairman of the Converse County commission, said wind revenues represent a small, but stable source of revenue — at least compared to other energy sectors. Through the first seven months of fiscal year 2016, sales and use taxes in Converse County were down 52 percent, or $21 million, compared with the same period the year before. Much of that decrease was attributable to the slowdown in the Powder River Basin oil patch.

“As long as those turbines are in production, we know that revenue source will be in Converse County,” Grant said.