"While wind energy enjoys a most favoured position in the federal tax code, we must remember that it remains a profit oriented business that should be treated the same as other energy producers," says Freudenthal, from the centre-left Democratic Party.
The excise tax is a compromise downward from the Governor's original proposal of $3/MWh, which would have amounted to more than the $0.21/kWh federal production tax credit that historically made the difference between wind farms being built or not. Even with the lower $1/MWh rate, many will be watching to see if wind developers can absorb the increased cost or will abandon Wyoming. Some have already left because of the hostile climate.
Additionally, lawmakers have proposed a new decommissioning fee on wind stations, which the wind industry considers unnecessary (Windpower Monthly, December 2009). The governor also wants to clamp down on a land rights provision that he says gives wind developers an unfair advantage over private property interests when seeking a right of way for connecting wind plants to the transmission system.
"The increasingly heated discussions around wind projects and power lines are just the beginning," says Freudenthal. "We must develop a set of fair rules that protect Wyoming people while providing certainty to wind developers." At the time of going to press, the excise tax was approved and heading to the Wyoming Senate for debate, amendments, and potential passage. Other measures such as a decommissioning fee or altering land rights provisions may also see approval.
A need to swell state coffers, as well as a desire to be seen to be fair to all energy types is driving the push for more tax and restrictions on wind. In the economic downturn Wyoming is looking for new ways to replenish drained state coffers. The state is also a major producer of natural gas, oil and particularly coal, providing more than 40% of all coal consumed in the US.
"Our legislature is looking at wind as if it's coal," says an insider at a regional economic development agency in Wyoming, which caters to a variety of business interests. "Politics is getting involved; it doesn't want to give one industry an advantage over another because basically the industry that brought us to where we're at is coal. And the coal, oil and gas industries have a very powerful voice here."
Last year, the Wyoming legislature shortened a sales tax exemption on wind turbines and other wind equipment, pulling the deadline from 2013 to the end of 2011.
PacifiCorp and Duke Energy are the biggest players in Wyoming wind. PacifiCorp brought 265MW online last year and has another 111MW under construction. Duke Energy brought 141MW online in 2009 and has another 200MW under construction.