RAWLINS — In Wyoming, wind energy is beginning to have a significant role in power generation after more than 135 years of drilling for oil and natural gas, mining coal and extracting other valuable mineral resources from the land.
While Wyoming’s mineral riches have the potential to generate millions in tax revenue annually, wind, a non-mineral — carbon-free — energy commodity is working to generate millions in revenue for the state as well.
There are a handful of new wind projects underway in Carbon, Albany and Converse counties. Each are in their permitting or construction stage.
Currently under construction is the $5 billion Chokecherry and Sierra Madre Wind Energy Project located on 320,000 acres just south of Rawlins. When completed it will be home to up to 896-wind turbines producing up to 3,000 megawatts of clean energy, making it one of the nation’s largest wind farms.
Construction began in September 2016.
Excluding wind projects still in the planning phase, the boost to Wyoming’s economy is approximately $7 billion with nearly 5,000 new jobs created, according to a 2016 University of Wyoming study that examined the estimated financial impact associate with the five wind projects underway.
While power companies and developers have reaped vast profits from fossil fuel production in the past so has Wyoming through tax revenues.
In 2012, oil production in Wyoming brought in nearly $254 million in severance taxes, natural gas $268 million, coal $288 million and Trona $18 million.
Combine these figures with property taxes, federal and state royalties and lease revenues, sales, and use taxes and conservation mill levies, oil and gas production contributed to state and local governments $1.9 billion in revenues.
For wind, if the current tax rates remain the same, during the next 20 years, wind projects across the Cowboy State could generate $750 million in local taxes, $424 million in state taxes and $721 million slated for education spending according to the UW Center for Energy Economics and Public Policy study.
Although these are theoretical financial projections wind has already proven it’s worth and turned in sizable financial returns for Carbon County.
Between April and June 2020, the county’s taxable sales and use tax revenues jumped by 108% from several new wind development projects, according to the state Economic Analysis Division.
Those projects include the Rocky Mountain Power TB Flats and Ekola Flats wind farms, Rocky Mountain re-powering of existing Carbon County wind farms, as well as Power Company of Wyoming’s Chokecherry and Sierra Madre Wind Energy Project.
As the country moves away from its dependency on fossil fuel for power generation — opting for a carbon-free approach — some state and local officials worry what will be the long term financial impact by capping oil and natural gas wells and abandoning the oil patch for renewable energy sources.
Rep. Jerry Paxton R-Encampment shrugs off the concerns.
“I’m not sure the two sources of energy are in direct competition with each other,” Paxton said. “We see power companies moving more in the direction of renewable energy, which has really become an economic benefit to Carbon County as well as the state.”
Currently six counties in Wyoming host wind farms: Albany, Carbon, Converse, Laramie, Natrona and Uinta.
Paxton stresses the importance of green energy development to the overall mix of electrons flowing down transmission lines that ultimately benefit the annual budgets of communities throughout Carbon County.
“I think going down the road a ways we will see the tax revenue increase from green sources,” Paxton added.
While not a complete answer to the loss of oil generated revenues in Wyoming, the Chokecherry and Sierra Madre Wind Energy Project south of Rawlins is expected to bring millions into Carbon County.
“Just like any other wind farm the first step is putting in the base infrastructure such as the roads and develop the site and that’s what we are working on now,” said Kara Choquette, communications director for the project proponent, Power Company of Wyoming (PCW).
“Through the end of 2020, we have completed 112 miles of roads — critical to operating and maintaining the project — we have completed 132 turbine pads and our expectations in 2021 is to add another 27 miles of roads and 29 wind turbine pads.”
The first turbines will start going up in 2022-23, with the project completion date tentatively scheduled for late 2026.
There are three revenue streams that will be going into the community; sales and use, property and electrical generation taxes.
Sales and Use Tax paid out during the construction phase of the project will eventually generate $232.4 million.
“This will be paid over the construction,” Choquette said. “The money will be spread out over a period of years as the turbines are bought online and other things are brought in to build the wind farm,” she added.
The second revenue stream, property taxes will be paid to Carbon County.
“We look at property taxes over the construction period and a 20-year period of operation, and during that time frame the wind farm will generate approximately $406.3 million,” Choquette said. “When fully built, this will make us the single largest taxpayer in Carbon County by a considerable margin, according to the U.S. Bureau of Land Management.”
The final revenue stream, the electrical generation tax, is $1 per megawatt-hour generated. However, this tax will not be applied until any given turbine has been operational for three years. Once a turbine reaches the three-year mark the tax will be paid in perpetuity but split 60/40 percent between the county and the state.
The electricity generation tax, $1 per megawatt-hour from the Chokecherry project is anticipated to pay $207.8 million to Carbon County and the state during its operational lifetime.
When finished, with wind farm will employ about 114 full-time employees.
According to the U.S. Bureau of Land Management’s final Environmental Impact Statement, Chokecherry’s employees and the local businesses supporting and benefiting from the wind farm will pump approximately $10 million annually into the local economy.
For Carbon County Commissioner John Johnson wind energy and the revenues that it generates is a double edge sword.
“They are coming in and putting the infrastructure in which is a big capital investment and we get sales tax revenue from that which helps us back fill some of the losses of jobs in the oil patch, but we have some issues with how the sales tax revenues are collected,” Johnson said.
“But on the backside of it when you are talking about baseload power leaving the county in the form of natural gas and oil generation you are putting people out of work and the revenue we get from wind doesn’t even come close to the loss in the oil patch.”
Along with direct economic impact at the local and state level, environmentalists applaud wind’s contribution to slowing down the effects of a changing climate.
The latest data found on the American Wind Energy Association’s website sites that more than 12,000 megawatts of wind power projects were under construction in 2013, and in 2019 the industry added 6,309 megawatts of wind capacity in the first nine months of the year setting a new record.
Now, more than 60,000 wind turbines, with a combined generating capacity of 111,808 megawatts operate across 41 states, Guam and Puerto Rico.
U.S. wind power has more than tripled during the past decade and is the largest source of renewable electricity. Wind currently generates 7.2% of the nation’s electricity or enough to power 27.5 million homes, the association said.
Texas leads the nation in wind-generated energy at nearly 31,000 megawatts. Wyoming currently generates slightly more than 1,800 megawatts.
There are also pluses to the environment.
Wind production in 2019 reduced domestic CO2 emissions by 198 million tons.
According to a U.S. Geological Survey report, between 2005 and 2014, fossil fuel extraction — including coal — on federal land contributed to nearly 24% of all carbon dioxide emissions nationally, and slightly more than 7% of methane and 1.5% of nitrous oxide emissions.