Proposed federal bill could enhance wind development

Trout Unlimited representatives met with Wyoming officials in Saratoga last week, discussing federal legislation that could affect the future of solar and wind development in Carbon County.

Members of Trout Unlimited, an Arlington, Va.—headquartered organization dedicated to conserving, protecting and restoring North America’s coldwater fisheries and their watersheds, discussed legislation with Carbon County Commissioner Sue Jones, Wyoming House District 47 Representative Jerry Paxton and reporters from across the nation during a three-day renewable energy summit at the Saratoga Resort and Spa.

With a balanced approach to public land wind and solar energy development in mind, Trout Unlimited is supporting legislation to establish what is called the Public Lands Renewable Energy Development Act (Senate Bill 279, House Bill 596).

Senate Bill 279 would create a pilot program to determine whether and how to transition to a leasing program for public land wind and solar projects, establish a royalty fee for public land wind and solar projects, and outline a clear process for current and pending projects to transition to a leasing system. Under the leasing system, lease revenue between county, state, conservation and government agencies would be split apart, which would therefore mean a cut out of Carbon County’s public land rental and royalty fees.

Carbon County is the proposed location of the Chokecherry and Sierra Madre Energy Project, a 1,000-turbine wind farm operation planned to go in on the Overland Trail Ranch nine miles northwest of Saratoga. The Denver, Colo.-based Power Company of Wyoming (PCW) is the company proposing to construct and operate the project.

According to the Power Company of Wyoming website, http://www.powercompanyofwyoming.com, the Chokecherry and Sierra Madre Energy Project’s long-term surface disturbance will be less than 2,000 acres of a 320,000-acre ranch owned and operated by an affiliate company. The site also stated that with the potential to generate approximately 2,500 megawatts of clean energy, the project will ensure a reliable, cost-effective supply of renewable electricity, and generate hundreds of good jobs, millions of dollars in tax revenue and other economic benefits for Carbon County.

Both Senate Bill 279 and House Bill 596 were referred to the Energy and Natural Resources Committee in early February, and have different revenue distributions of wind and solar lease revenues. According to Section 204 of Senate Bill 279, 25 percent would go to the state where projects are sited, 25 percent would go to the counties where projects are sited, 15 percent would fund the Interior Department to cover the costs of processing wind and solar lease applications and 35 percent would be deposited into a fund for fish, wildlife and land conservation.

The difference with House Bill 596 is that, under Section 204, 25 percent of revenue would be deposited in the conservation fund, 10 percent would be put toward deficit reduction and 15 percent shall be paid by the Secretary of the Treasury directly to the State offices of the Bureau of Land Management and regional office of the Forest Service. Like Senate Bill 279, with House Bill 596 25 percent would still go to the state, and 25 percent would still go the counties.

Brian Zupancic, Trout Unlimited Renewable Energy Campaign Director, said the bill was one the company spent much time constructing and supporting.

“As I mentioned we played a big part in the last couple of years in helping sort of construct this legislation as one of its major champions,” he said. “A lot of the work that Trout Unlimited does across the west has to do with abandoned mine restoration and cleanup. So, seeing the effects of industrial energy development over the years and the unfortunate legacy that it can leave behind, and the work and the money that’s needed to reclaim those lands and clean up after them, was sort of the impetus for getting behind this legislation.”

Carbon County Commissioner Sue Jones said she felt that without additional funding, she was unsure if Carbon County’s infrastructure could take on such a large development that could bring major impact and opportunity to Carbon County.

“On the county’s level it’s very complicated, we have to look at the big picture and we have to be smart about how we’re going to manage this,” she said. “We’re definitely learning that we need to get in on the ground floor at the very beginning in the mitigation process. There is no community in this county that can handle the impact that they’re talking about with workers, and for after the workers are gone, the people who actually will work the projects. That’s pretty much where the county comes from, and this legislation would help immensely.”

Jones also expressed the need to make sure the area’s nature-related economies were preserved when such a wide-scale development was in mind.

“There are existing economies here right now that cannot and should not be sacrificed,” she said. “We have ag (agriculture), hunting, fishing, recreation and tourism, and those are very viable economies, particularly in this area of the county. We cannot sacrifice those, and we cannot give up why we live here, why I like it and why I have been here 54 years. It’s ‘home,’ and we need to take care of ‘home.’”

PCW Director of Com-munications Kara Choquette said the company supports much of Senate Bill 279, but with one opposition in mind.

“Regarding the proposed Senate Bill 279, PCW can support the bill in part, but we strongly oppose the portion of the bill (Section 205) that provides for additional royalties on electricity produced by wind,” she said. “Currently PCW’s wind project is subject to a Wyoming sales/use tax on renewable energy equipment purchases, Wyoming property taxes on the entire project, and a Wyoming electricity generation tax of $1 per megawatt-hour of electricity produced by wind. In addition, currently there is a federal rental fee/royalty of $4,155 per megawatt of nameplate capacity installed on federal land.” Choquette explained nameplate capacity is not the same as electrical generation.

Choquette said that based on a 3,000 megawatt nameplate capacity, 1,000-turbine wind project, and assuming that approximately 1,500 megawatts or 500 turbines are sited on public lands in the checkerboard on the ranch over a three-year construction period and 20-year operations period, PCW already is looking at paying approximately $819 million in total state taxes and federal rental fees/royalties.

According to Choquette, PCW looked to understand the potential financial impact of Section 205 from Senate Bill 279 on the project, and developed scenarios that assumed a range of power prices ($60/megawatt hours and $100/megawatt hours), assumed an estimated production of 10.5 million megawatt hours of electricity per year, and considered both the low end and high end of the royalty range as set out in Senate Bill 279. 

“In just one scenario – the one with the lowest royalty percentage – the federal royalties due were decreased, and the decrease for PCW was $22 million,” Choquette said. “However, in all of the other scenarios, the proposed legislation would substantially increase PCW’s federal rental fee/royalties due. The increase in federal royalties over the current federal rental fee of $117 million ranges from an increase of $41 million, to an increase of $277 million over 20 years, thereby potentially increasing the total project tax burden by up to 33 percent.”

Choquette added this additional cost would have a significant negative impact on project economics, and would have to be considered in the overall project viability evaluation that takes place prior to construction commencing. Section 205 also does not further the stated purpose of the overall bill, which says it is “to promote the development of renewable energy on public lands.”

For more information on the Chokecherry and Sierra Madre Wind Energy Project, visit http://www.powercompanyofwyoming.com.