Governor Freudenthal promotes wind project legislation
by Governor Freudenthal media release
February 6, 2010
Problems associated with the massive development of Wyoming wind energy "are simply opportunities dressed in work clothes," according to Gov. Dave Freudenthal.
"With proper ground rules, wind energy can generate income for the agricultural community, help diversify Wyoming’s economy and tax base and perhaps become a significant source of employment," the Governor continued. Freudenthal has scheduled an 11 a.m. news conference today to discuss four proposals for the Legislature to consider:
(1) Strengthening the Wyoming Industrial Information and Siting Act to ensure adequate bonding or other financial assurances so that the facility will be operated properly from initial site construction, through operation, decommissioning and eventual reclamation.
(2) Providing minimum state standards and enhancing county permitting requirements for the proper siting of wind facilities, such as setbacks from homes, roads and towns.
(3) Imposing a $3.00 per megawatt hour excise tax on wind energy produced in Wyoming, with a provision to send 40 percent of the revenues to local governments, and 60 percent to the state General Fund. The tax would return an estimated total of $5.9 million per year to the six counties where wind projects are already in operation. Converse County would receive the largest share of that figure, an estimated $2.25 million in 2011. In the aggregate this is believed to equate to a 5 percent excise tax.
(4) Suspending the power of condemnation for one year where it might be used to gain access to private lands to construct wind energy collector lines (those lines that tie the wind farm to the electric grid) and asking the Legislature to study the issue before adopting a permanent solution.
Freudenthal praised the Wind Task Force created by the 2009 legislative session for its policy recommendations to improve the Wyoming Industrial Information and Siting Act and local government permitting requirements.
"During the last legislative session, we all knew it was time for a long, hard look at wind development in Wyoming," Freudenthal said.
"With representatives from across the spectrum, from local governments to the wind industry itself, we all got an education and, ultimately, a first cut at some meaningful changes that will hopefully lead to better planning and more involvement from local governments and private citizens on the front end of these projects," the Governor said. Proposals (1) and (2) are a direct result of the Wind Task Force Report.
"Wind energy developers should pay an excise tax based on the amount of power generated with a large share of the revenue returned to the county of origin. A production tax moves towards a level playing field for all Wyoming energy producers and helps diversify Wyoming’s tax base. While wind energy is one of the heroes of the former Vice President’s ‘Inconvenient Truth’ and it enjoys a most favored position in the federal tax code, we must remember that it remains a profit oriented business that should be treated the same as other energy producers," Freudenthal said.
The Governor is concerned with the broad powers of condemnation wind developers enjoy when building transmission lines from the wind farm to the electrical grid because the developers are, by their nature, merchant ventures.
"I doubt that most legislators or citizens understand the degree to which current state eminent domain law favors the merchant developer over the private property rights of the landowner. This tends to weaken the landowner’s position during negotiations. It also encourages building lines on private rather than public lands since condemnation cannot be used against federal or state land interests," Freudenthal said.
Citing a need to "take a breath" on the question of condemnation, Freudenthal noted his hope "that the right of condemnation for collector systems could be suspended for a year so the Legislature can define appropriate sideboards for the exercise of eminent domain by wind developers, particularly tied to the issue of landowner compensation."
"The increasingly heated discussions around wind projects and power lines are just the beginning. We must develop a set of fair rules that protect Wyoming people while providing certainty to wind developers. The wind energy development problems can be addressed by taking this opportunity to do right by Wyoming. And opportunity seldom knocks twice," Freudenthal said.