CHEYENNE – Wyoming could be at a crossroads when it comes to a potential boom of wind energy projects in the state.
While developers are warning wind’s success in the state could hinge on whether state lawmakers choose to hike taxes on the industry, a proponent of increasing taxes on wind isn’t buying it.
Regardless of what happens with taxes on wind, the face of energy development in Wyoming is changing.
With renewable energy on the rise worldwide, Wyoming could be a standout beneficiary when it comes to wind. Between Rocky Mountain Power, Power Company of Wyoming and Viridis Eolia Corp., private companies are preparing to invest billions in the Cowboy State to establish wind farms and transmission lines.
“Just like Wyoming was blessed with some of the best reserves of coal, Wyoming is also blessed with over 50 percent of the quality wind in the United States,” said Loyd Drain, an energy consultant and former executive director of the Wyoming Infrastructure Authority. “And depending on what Wyoming does with that, they could really use the revenue relative to that to offset the decline that’s occurred in coal revenues, and that’s going to continue to decline.”
Economic indicators in the state seem to be offering some reason for optimism, but state agencies and departments across the board are likely to face continuing budgetary reductions in the near future.
And no matter what President Donald Trump promised about reviving the coal industry – one of Wyoming’s key revenue sources – it is unlikely it will ever return to its previous economic prominence, said Rob Godby, director of the University of Wyoming Center of Energy Economics and Public Policy.
“The big change that’s happened in the last four years is no one is building coal plants,” he said. “There’s not a single coal-fired power plant planned to be built in the country. Not just this year, next year or the year after. They just aren’t building them anymore because they’ve become uncompetitive.”
In a best-case scenario, Godby said coal production is likely to remain about where it is now, though most projections show a gradual decline. Much of coal’s decline is a result of the rise of natural gas, but at the same time, Godby said “irresistible market trends” are likely to continue feeding growth for renewable energy sources. Most of that growth is occurring with wind, he said, because the economic incentives are becoming more appealing.
“The reason Rocky Mountain Power made the announcement they’re going to spend $2.5 billion potentially for new wind infrastructure, or $3.5 billion total – we’ll talk about Viridis Eolia working with Goldwind, Power Company of Wyoming – the reason all these projects exist is because this makes sense,” Godby said. “This is the cheapest form of generation to build.”
Godby and Drain were speaking to participants at Tuesday’s Wind Operation and Maintenance Conference, hosted by Goldwind Americas in Rawlins. Goldwind Americas, a division of Chinese wind turbine manufacturing company Goldwind, hosted the informational seminar to gauge interest among Wyoming workers in its Goldwind Works program, designed to provide free wind farm technician training to workers from transferable industries, such as coal mining.
More than 80 people attended the seminar in Rawlins. With sessions scheduled Wednesday in Casper and today in Gillette, there is potential for significant interest among Wyoming workers.
Virdis Eolia CEO Juan Carlos Carpio-Delfino spoke Tuesday about the Little Medicine Bow Wind Project, an enormous wind farm proposed for Carbon County that could break ground in 2018. Between construction jobs and permanent technicians needed for the farm when it becomes operational, Carpio-Delfino said it could bring game-changing benefits to Carbon County and the state.
“When all is said and done, it’s about a $2.4 billion investment that will come from various sources,” he said. “Tax revenues for the state in a 20-year period will come to about $500 million, roughly.”
But the project and future investments could be in jeopardy because of pressures from state lawmakers, Carpio-Delfino said. Two bills came before the Wyoming Legislature earlier this year that would have increased Wyoming’s wind production tax.
“Because of lowered income in the state, the Legislature has drawn twice the acts of war on wind projects (by) trying to raise these taxes,” he said. “That would surely endanger the possible implementation, not only of our project, but of any wind project in the state.”
While both bills died in committee, the Joint Revenue Committee’s agenda for its August meetings will see the idea floated again. Whether any proposals to raise taxes on wind energy generation are passed in 2018 or not, Carpio-Delfino said the prospect creates a “confidence crisis” for investors.
“If you’re going to come into any business and spend or invest over the next 20 years $2.4 billion, and you fear that the rules of the game are going to change midway, then you get scared,” he said.
Sen. Cale Case, R-Lander, co-sponsored a bill earlier this year that would have raised Wyoming’s tax from $1 per megawatt hour generated by wind energy facilities to $5. Even though the bill died in this year’s session, he said he feels more encouraged to bring the proposal back in 2018.
“I’m definitely excited in finding more traction,” he said.
Case isn’t convinced by the warnings that any increase in tax would permanently endanger the future of Wyoming wind energy development. And since a considerable portion of Wyoming’s wind energy would be exported out of state, he said it’s important that future generations have something to gain by disrupting viewsheds with wind farms.
Additionally, with so much potential in Wyoming, Case said its likely an already active lobby for opposing wind taxes would only become more powerful after development occurs, making it difficult to impose taxes in the future after the fact.
“Our wind is the best wind, and if we believe wind has finally become efficient, then there’s no question we need to get something out of it,” Case said. “We’ll never get a second chance. … Wind energy is renewable, but the impacts on our vistas are nonrenewable. It’s appropriate to get something to compensate future generations.”
Drain said he hates to see coal decline in Wyoming, but the situation is really about economics. Furthermore, he said he’s not particularly motivated to support wind because of environmental concerns.
“I’m not a real advocate of climate change myself, but you can’t deny the principle of economics,” he said.
Imposing a higher tax burden on wind isn’t about a battle between fossil fuels and renewable for Case, either, he said. For him, it’s also about economics.
“There are colleagues of mine that are mad about environmental regulations and what it’s done to coal, and they want to get even, but that’s not my position,” Case said. “I’m pleading with people to think of wind on its own terms and the long-term impact of wind to Wyoming.”