CASPER — It took former Rep. Tim Hallinan, R-Gillette, four tries to lower the state tax on coal production by half a percent.
This session, current lawmakers have brought back several other previously unsuccessful bills aimed at the energy sector.
House Bill 69, sponsored by Rep. Lloyd Larsen, R-Lander, would give the governor’s office a lot more leeway to use funds already appropriated for lawsuits in defense of Wyoming’s coal industry.
House Bill 124 would impose the same $1 per-megawatt hour tax on solar power that the state already levies on its wind farms. It was sponsored this year and in 2021 by Rep. Albert Sommers, R-Pinedale, and in 2020 by the Appropriations Committee.
And House Bill 163, put forth for a second consecutive year by the Select Federal Natural Resource Management Committee, is designed to blunt the impact of federal oil and gas production taxes — which have gone up since the last legislative session — on companies operating in Wyoming. Each bill, if successful, could have major implications for the industry it targets.
Increasingly concerned about the fate of Wyoming’s coal industry and searching for ways to preserve it, the Legislature in 2021 gave the governor’s office $1.2 million to sue other states over actions that “impede the export of Wyoming coal or the continued operation of Wyoming’s coal-fired electric generation facilities, including early retirements of those facilities.”
An attempt last year to expand the scope of legal actions that would qualify for the funding, backed by more than a dozen legislators, never made it out of the House.
The bill would allow the governor’s office to challenge the federal government, in addition to states, and to join and defend lawsuits. And it would broaden the scope of possible lawsuits to include actions “that result in the decreased use of Wyoming coal or the closure of coal-fired electric generation facilities that use Wyoming coal.”
“The audience is just bigger,” Shawn Taylor, executive director of the Wyoming Rural Electric Association, said in support of the bill last year. “The message is the same.”
This year’s attempt passed its second of three readings in the House of Representatives on Wednesday — farther than it got in 2022.
If the bill survives the House, it’ll then move on for consideration in the Senate.
Wyoming is still fighting hard for its coal industry. It’s also trying to figure out how to make up for the lost revenue if coal does succumb to the market forces that are pushing it out of the electricity sector.
Some legislators believe creating (or raising) taxes on younger electricity sources, including wind, solar and nuclear power plants, is an obvious place to start.
“I just feel like it’s an equity issue,” Sommers, the bill’s two-time sponsor, told the Star-Tribune in 2021. “I think it is important that these industries pitch in,” he added.
Wyoming’s electric utilities and the solar developers who are eyeing the state — or are already here — see things differently.
Generation taxes, they’ve warned repeatedly, will make Wyoming less competitive against states that have similar solar resources but lower taxes. It’s likely that the state’s attempts to tax solar, on top of measures like a 2017 attempt to ban utility-scale wind and solar, have already deterred some prospective developers.
The bill died in the Revenue Committee in 2020 and 2021. It was successfully introduced again on Wednesday and referred to the Appropriations Committee.
Unlike the other returning bills, House Bill 163 has changed visibly since its last appearance in the Legislature. It’s longer this time, and more thorough.
The proposal, which would refund oil and gas producers a share of their state taxes to compensate for an increase in federal taxes, proved controversial last year.
Wyoming is the top natural gas producer and No. 2 oil producer on federal lands. The bill’s backers say it sends a message to producers that the state is on their side.
“Anything that could assist in bringing down the cost of doing business on federal lands obviously makes those parcels more enticing to operators,” Ryan McConnaughey, communications director for the Petroleum Association of Wyoming, told the Star-Tribune in 2022.
But with Wyoming actively trying to patch its budget, not everyone agreed that it was in the state’s best interest to give away its half of the additional royalties that would be paid to the federal government.
Plus, at the time, the tax rate hadn’t actually gone up yet, making the entire discussion hypothetical.
The federal government has since raised royalties on land leased from the Bureau of Land Management from 12.5% to 16.75% and hiked other related costs.
The oil and gas industry considers it a betrayal. Environmental groups, meanwhile, see it as the bare minimum.
As the bill awaits introduction in the house, how it will fare this year remains to be seen.