CHEYENNE, Wyo. — Wind energy companies would be willing to pay higher taxes on energy production in Wyoming in exchange for giving up state sales tax on the generating equipment they use in wind farm construction, officials told a legislative committee on Wednesday.
The House Revenue Committee opened a hearing on a bill sponsored by Republican Rep. Tim Stubson of Casper and others.
Stubson's bill would triple the tax rate that goes into effect next year on new wind projects, from $1 per megawatt hour to $3 per megawatt hour. In exchange, the bill would exempt wind projects from sales tax on materials used in their construction.
Stubson said the bill would increase total state revenues slightly over the lifetime of wind projects. He said it would also save the wind industry money because companies would no longer need to borrow to cover the upfront sales taxes.
"One of the things we found in looking at the impacts of the current tax structure is it does pose a barrier to development in Wyoming," Stubson said.
Several industry representatives said they support the bill and that it would improve Wyoming's posture as it competes with other Western states for new wind development projects.
Cheryl Riley, executive director of the Wyoming Power Producers Coalition, said she represents many companies working on the wind energy issue in the state that support Stubson's bill.
Chad Calvert, representing BP America, said the state's tax regime is the only barrier to development of wind power in the state that the committee has authority over.
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"Our tax rates in Wyoming aren't the problem," Calvert said of the tax on energy production. "Our problem is you have to finance the sales tax."
The bill calls for wind farms that come on line after next January to pay the new $3 per megawatt hour tax immediately. It would be ramped up to that level gradually for existing wind farms.
"Eventually you have every wind production facility in the state being taxed on an equal basis," Stubson said. The bill would not affect property taxes that wind farms must pay.
Shawn Reese, spokesman for Gov. Matt Mead, said the governor supports the bill in principle. Reese said Mead would like to see the state reduce the revenue spikes that occur under the current tax system.
Terry Weickum, chairman of the Carbon County Commission, spoke against the bill. He said his county already has about 1,000 wind towers but doesn't receive enough back to cover the cost of county services.
"You must recognize that these huge wind farms are going to change the landscape of Wyoming forever," Weickum said. He said the U.S. Bureau of Land Management reports that companies are working on scoping for 54 wind farms in his county currently, and that one 1,000-tower wind farm is slated to be built.
"For them to make threats that they're not going to come to Wyoming, I just don't believe that," Weickum said of the wind industry.