Wyoming Governor Dave Freudenthal recently announced proposals for wind energy for his state, the most controversial of which is a $3 per megawatt-hour excise tax, the first of its kind in the United States.
The state has a budding wind-power industry because of low property costs and a steady flow of wind, and the governor’s tax policy is attempting to capitalize on that.
“It can help keep people in agriculture. It can help people have jobs, and hopefully, it can lead to some manufacturing facilities in the state,” he said. “Having said all that, they are not entitled to a free ride. This is the first opportunity that this state has had in my lifetime to actually diversify its tax base.”
According to Freudenthal, the proposal would impose a $3 per megawatt-hour excise tax on wind energy produced in Wyoming, with a provision to send 40 percent of the revenue to local governments and 60 percent to the state general fund. The tax would return an estimated total of $5.9 million per year to the six counties where wind projects are already in operation. Converse County would receive the largest share of that figure, an estimated $2.25 million in 2011. In the aggregate, this is believed to equate to a 5 percent excise tax.
Many other state governments are offering incentives and tax breaks to bring wind industry to those states in an effort to meet impending renewable-energy requirements.
Despite the fact that this income would relieve some pressure from the average tax payer who already will see utility rates rise, there’s concern whether it would affect wind-power developers’ decisions to build in Wyoming.
“I appreciate the fact that people can say it has great environmental benefits, but that’s people who don’t live next to them, or whose wildlife habitat isn’t being disrupted, or the bird population isn’t being affected, or whose view isn’t being altered,” Freudenthal said.
According to the American Wind Energy Association (AWEA), Wyoming’s wind-energy generation capacity nearly quadrupled in 2008 and 2009, to about 1,100 megawatts. The state ranks 12th in the nation for its existing wind capacity and seventh in potential capacity, according to the group.
“It is very disturbing to hear that one of the great states for resources wants to tax the industry and discourage the development of jobs in their state,” said Denise Bode, head of the AWEA.
At press time, the proposal had passed the state House of Representatives.