Wyoming Confronts Its Wind-Powered Destiny

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    In Cheyenne, the state capital, however, the prospectors were about to get schooled. Lawmakers at the gold-domed capitol building studied reports by consultants who suggested that Wyoming’s wind was so superior that the industry could bear a tax on energy production. Michael Madden, a Republican state legislator from northern Wyoming, helped shepherd a proposal for a tax on every megawatt-hour generated by wind. Minnesota was the only other state with such a tax, but that was levied instead of a property tax on wind farms; Wyoming was considering adding the generation tax on top of an existing property tax.

    The idea didn’t seem all that edgy to Madden. Mining companies pay severance taxes for “severing” minerals from the land, and the way Madden saw it, wind farms were severing something too—the state’s picturesque landscape. Turbines, jutting up into the horizon, are a stain on the state’s rolling hills, mountain ranges, and big open skies, he argued. “The pristine nature of the state,” he said, was being violated.

    Renewable energy proponents flooded the halls of the state capitol with counterarguments, contending the tax would impede the growth of a new industry, one that could bring new jobs, albeit not as many as coal. They also noted that coal extraction, with its gaping strip mines that slice across the terrain, disturbs the landscape too.

    In the end, the legislature passed a $1-per-megawatt-hour tax, to be imposed after a three-year grace period. It was lower than the $3 tax Madden had wanted, but it was not the only one levied on wind. The lawmakers also let a sales tax exemption on renewable energy equipment, like turbines, expire in 2009—which made construction costs more expensive. Wind proponents argued that the state effectively had imposed three taxes on the industry—on sales, on generation, and on property.

    Spare wind turbine blades lined up at Pacificorp’s Glenrock site.Photograph: Cody Cobb

    Across the country, meanwhile, the Obama administration was trying to encourage wind energy projects by extending federal tax credits. Wind farm developers chose other states with steady wind and more hospitable legislatures.

    From 2011 to 2017, while wind farms proliferated throughout the US, not a single company completed a new utility-scale wind project in Wyoming. The tax “had a chilling effect on some developers wanting to invest more in the state,” says Tom Darin, senior director of Western state affairs for the American Wind Energy Association, a trade group. At least one developer that was already working in Wyoming, Duke Energy, took its new efforts elsewhere, investing $3 billion in other states.

    While wind development came to a standstill, calamity struck the state’s main sources of revenue. In the decade since Wyoming’s 2009 legislative session, coal production has fallen. In the first quarter of 2019, it was down about 30 percent compared with 10 years ago—despite the Trump administration’s repeal of the Obama-era Clean Power Plan, which aimed to reduce emissions from fossil fuels. No one is predicting a turnaround. Last fall, two of the state’s largest mining companies filed for Chapter 11 bankruptcy, leaving nearly 600 miners without a job overnight. “We’re seeing the death of an industry the state has depended on for decades,” says Robert Godby, deputy director of the Center for Energy Regulation Policy at the University of Wyoming. (Coal paid $199 million in Wyoming severance taxes in 2018; the power generation tax on the state’s wind farms brings in about $4 million a year.)

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