Wyoming is considering imposing a third type of tax on wind energy projects, and it is drawing national scrutiny, even from economists.
Last week, the Wyoming wind electricity tax was passed by the Wyoming House, and it is now being considered by the state's Senate. Though not unprecedented, the $1 per megawatt-hour tax is unusual, especially since other states are developing incentives, not disincentives, to bring in wind projects. The Wyoming move is viewed with consternation in the industry. On the one hand the state has great potential for wind development. But its policies have not been wind friendly. What's a developer to do? An economist is suggesting that the new tax – which is in addition to property taxes and sales taxes on wind starting next year — send developers to states that are less windy but more receptive to the industry.
Writing in the Christian Science Monitor, Matthew Kahn, an economics professor at UCLA says, “The presence of the tax in Wyoming could lead the self interested firms to go to the “wrong” location,” namely, a state with less wind but a better tax climate. Kahn warns, “If you tax the “golden goose” you risk losing your goose!”
Food for thought, Wyoming?