By Amanda Fry/Original Source

As wind energy associations continue to work towards agreements with wind developers wishing to construct wind farms in Wyoming, obstacles from the possibility of increased taxes on the farms, as well as a continued lack of transmission lines, are posing threats to the wind industry in the state.

“You will find right now that Wyoming isn’t one of the friendliest states anymore [to wind development],” Dr. Tom Laviolette, President of Novelution Wind LLC in Chugwater said.

“It was a few years ago, but it’s getting to the point now where there’s not advantages here in Wyoming.”

Laviolette, who also oversees wind development projects in other states as well as Wyoming, cited taxes as a major drawback to building wind farms in Wyoming. He said in other states, wind developers do not have to pay property or sales tax on their farms, which makes it cheaper to construct facilities, despite the fact that the wind quality in Wyoming is higher.

“I still believe that Wyoming has some of the best wind regimens overall in the United States,” he said. “But right now, there are some things that are pushing us back.”

Currently, the Wyoming State Legislature is considering implementing a generation tax on wind farms. Laviolette said this tax is a “particular danger to Wyoming wind development because it comes on top of other taxes,” as well as the added constraint of a lack of transmission lines in the area.

Laviolette also cited potential competition for Wyoming, such as an off-shore wind farms located near large coastal cities, which would eliminate the need for transmission lines.

“Many offshore wind resources not only match the quality of Wyoming wind, but also exceed it,” he said.

During a meeting with several County leaders, Bob Whitton, Chairman of the Renewable Energy Association of Landowners (REAL), cautioned against overtaxing the wind industry, warning wind developers would go to other states where taxes were not as high.

“They will develop first where it’s most profitable for them,” he said. “They will not come here because this is the best wind, they will come here first because this is where they can make the most money.

“Maybe they will come back to Wyoming later, if at all.”

Whitton said the high taxes, coupled with a lack of transmission, has made wind energy from Wyoming expensive. He cited Colorado, where utility companies have declared Wyoming wind energy “too expensive,” and are purchasing power within Colorado. Whitton said this announcement has put the Wyoming-Colorado Intertie, a transmission line between the two states, “at death’s door.”

Grant Stumbough, Coordinator for the Southeast Wyoming Resource Conservation and Development District, said while taxes on the wind farms are important, Wyoming needs to be careful to implement a fair tax structure.

However, with the repeal of sales tax exemption for wind developers set to take place in 2011, Stumbough said that Wyoming wind developers would soon be facing higher taxes than they would in “any surrounding state.” He added the proposed introduction of a generation tax on the turbines would only add to this cost.

“We could potentially tax this wind industry right out of the state,” he said. Stumbough said currently the “biggest constraint” to wind energy in Wyoming is the lack of transmission lines to export energy generated by the wind farms. According to Stumbough, Wyoming, which mainly exports energy, currently requires more transmission construction than any other state in order to transport the power generated by wind plants.