Herald Lusk | Committee rejects proposed structure of energy tax
CASPER – Senator Cale Case on Thursday proposed a new tax structure for energy that would be shared among all electricity producers. But a motion to draft a bill for the plan failed by a 4-9 vote in the joint revenue committee.
Case, R-Lander, described a gross revenue tax that would be levied on total producers’ sales, but would allocate credits for existing production costs, including exit taxes paid by coal, oil and gas companies. .
“The world is changing and we will have to leave a lot of these minerals in the ground,” Case said. “But God has also provided us with abundant resources of sun and wind.”
Wyoming already imposes a $ 1 per megawatt hour tax on wind power and a $ 5 per megawatt hour tax on large nuclear reactors. Small modular nuclear reactors are exempt from the nuclear tax. There is currently no tax on solar energy, although lawmakers have pushed for solar taxes in the past.
According to Case, a gross revenue tax would ensure that as demand for fossil fuels declines outside Wyoming – forcing the energy exporter to comply to stay competitive – the state would continue to collect revenue from its new sources of electricity.
“A gross revenue tax is technologically neutral,” Case said. “And it will adapt as our generation mix changes over time, so we can get into promoting the electricity produced here and get the tax benefits.”
In his presentation to the committee, Case noted the small portion of the electricity produced in Wyoming that is consumed by residential and commercial buyers. Only 4% of the new tax would be borne by these groups, while 85% would be passed on to out-of-state customers, he said. “It’s a good deal for Wyoming.”
With densely populated states like California and Washington demanding more wind power than they can realistically install within their borders, Case said, Wyoming has the option of forcing those states to pay the bulk. of its new taxes on electricity.
But the committee was not convinced. Rep. Mark Jennings, of R-Sheridan County, questioned the usefulness of moving away from fossil fuels – which he called a bargaining chip for the state – as other states still seek to switch efficiently to renewable energies. Senator Jim Anderson, R-Casper, has expressed concern about undermining the new Wyoming Energy Authority as it refines the state’s energy strategy. Representative Tim Hallinan, R-Campbell, called for a tax to be imposed only on wind and solar.
“This is what California wants. They want wind power. Well, let’s let them pay for it, ”Hallinan said.
Representative Mike Yin, D-Jackson, was one of the few lawmakers to voice support for the proposal. A gross revenue tax could help the state avoid favoring some sources of electricity generation over others, he said. And Rep. Jim Roscoe, I-Wilson, argued that, at the very least, it would be an alternate option for the committee to compare with the current generation tax model.
Then Yin offered to draft a bill, the motion failed, and the committee moved on.