For years, local governments in Wyoming have been receiving and continue to receive property tax payments for each multimillion-dollar wind turbine, and wind farm projects must pay property taxes every year in accordance with state and county tax schedules. Property tax revenue is then distributed to counties and to entities within the county such as schools, hospitals, museums and libraries, and a large portion of property tax revenue goes directly to the state of Wyoming.
Just as one example, a wind farm project in Uinta County with 141 megawatts of wind energy paid almost $1.8 million in property taxes in 2009. The project will pay more than $30 million in estimated property taxes over its economic life.
Besides the current property tax revenue that counties receive, two additional tax streams soon will apply to wind energy projects, providing even more money to all levels of government.
— First, the state’s sales tax exemption on renewable energy equipment has been allowed to expire as of next year, so sales/use taxes of up to 6 percent will be required on wind turbines (which cost $2 million to $4 million each). Sales/use tax revenue is distributed directly to incorporated municipalities, counties and the state.
— Second, the 2010 Legislature adopted a new wind electricity generation tax of $1 for every megawatt-hour of electricity produced. That tax begins on all existing and new wind turbines in 2012. Per the bill that was passed, counties will receive 60 percent of the money, and the state will receive 40 percent of the money.
These three tax streams are in addition to multiple other economic benefits that wind energy already brings to our state, such as construction jobs, long-term operations and maintenance jobs, and demand for a huge range of local goods and services. Perhaps most important, landowners in Wyoming receive revenue from wind projects, whether they are operational or in the development stage. That’s money that often helps a rancher stay on land that’s been in the family for generations.
It’s also vital to recognize that many of the energy companies developing wind projects in Wyoming have long held and invested in our state’s traditional energy interests. Whether drilling for oil and natural gas or buying millions of tons of Wyoming coal, for decades these energy companies have provided staggering amounts of tax revenues that have allowed all of us to enjoy a great way of life. Given today’s energy markets and demands, these energy companies now see the potential of adding Wyoming wind to their existing business portfolios.
However, this investment may not happen if Wyoming policymakers tax wind energy to a degree where it can’t compete. Wyoming has great wind, but so do other states. And the renewable energy market we must compete in includes solar and geothermal renewable resources, not just wind. The utilities likely to buy Wyoming energy products typically are required to pick the lowest-cost resource to serve their customers — so if the lowest-cost renewable resource isn’t here, they’ll find it elsewhere. The result? Loss of tax revenues to counties, loss of payments to landowners, and a loss to Wyoming companies that look to profit from the wind industry.
In the 1970s, Wyoming legislators got the policy debate right regarding coal, and now we all enjoy great benefits from this industry. We’re optimistic they will do the same with wind and keep the Wyoming flag flying at the forefront of all forms of energy development.
By Cheryl Riley, Wyoming Power Producers Coalition, www.awea.org/blog/