Committee rejects proposed energy tax structure
September 30, 2021
CASPER — Sen. Cale Case on Thursday proposed a new energy tax structure that would be shared across all electricity producers. But a motion to have a bill drafted for the plan failed by a vote of 4–9 in the Joint Revenue Committee.
Case, R-Lander, outlined a gross receipts tax that would be levied on producers’ total sales, but would allocate credits for existing generation fees, including the severance taxes paid by coal, oil and gas companies.
“The world is changing, and we’re going to have to leave a lot of those minerals in the ground,” Case said. “But God also provided us with abundant sunshine and wind resources.”
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 power, though legislators have pushed for solar taxes in the past.
According to Case, a gross receipts tax would ensure that as demand for fossil fuels wanes outside Wyoming — forcing the energy exporter to conform to stay competitive — the state would continue to collect revenue from its new electricity sources.
“A gross receipts tax is technology-neutral,” Case said. “And it will adapt as our generation mix changes over time, so we can get in the business of encouraging electricity generated here, and get the tax benefits.”
During his presentation before the committee, Case emphasized the small share of electricity produced in Wyoming that’s consumed by residential and commercial buyers. Just 4% of the new tax would be borne by those groups, while 85% would be passed to out-of-state customers, he said. “That’s a good deal for Wyoming.”
With densely populated states like California and Washington demanding more wind energy than they can reasonably site within their borders, Case said, Wyoming has an opportunity to force those states to pay the bulk of its new electricity taxes.
But the committee wasn’t convinced. Rep. Mark Jennings, R-Sheridan County, questioned the practicality of moving away from fossil fuels — which he characterized as a bargaining chip for the state — when other states are still figuring out how to transition effectively to renewables. Sen. Jim Anderson, R-Casper, expressed concern about undermining the newly formed Wyoming Energy Authority as it refines the state’s energy strategy. Rep. Tim Hallinan, R-Campbell, called for a tax to be imposed only on wind and solar.
“That’s what California wants. They want wind energy. Well, let’s let them pay for it,” Hallinan said.
Rep. Mike Yin, D-Jackson, was one of a handful of legislators to express support for the proposal. A gross receipts tax could help the state avoid favoring some power generation sources over others, he said. And Rep. Jim Roscoe, I-Wilson, argued that, at the very least, it would be an alternative option for the committee to compare with the current generation tax model.
Then Yin proposed having a bill drafted, the motion failed and the committee moved on.