By Leo Wolfson, State Political Reporter
The Wyoming legislature has approved legislation that could give wind and solar companies tax relief, but not without debate from some who say green power isn’t already paying its way into the Cowboy State.
“Wyoming citizen taxpayers are begging the Revenue Committee for relief and the Corporations Committee wants to provide tax relief to wind and solar companies that fail to meet property tax revenue commitments made in the apply for a permit through the Wyoming Industrial Council,” said Sen. Cale Case, R-Lander, in opposition to the bill.
The Corporations, Elections and Political Subdivisions Committee on Thursday approved a bill that would return the assessment of Independent Power Producers (IPPs), defined as a private entity that owns facilities to generate electricity for sale to utilities and end users, to the Wyoming Department of Revenue.
Some county clerks and commissioners and lawmakers like Case feel the state hasn’t accurately assessed these industries.
Break with protocol
A few years ago, the Wyoming Department of Revenue made an administrative decision that evaluation of IPP programs would move to the county level.
“I really don’t believe the law allows the Department of Revenue to assess independent power producers,” said Brenda Henson, director of the state Department of Revenue.
Henson said the DOR originally started evaluating IPPs because it thought utility companies would operate the facilities.
Brian Judkins, administrator of the Department of Revenue’s property tax division, said his department and county assessors have the ability to assess IPPs. The DOR rates regulated utility companies statewide that were previously considered IPPs.
“They’re not utility companies, they really aren’t,” Case said.
Case said wind and solar farms are more like refineries and other industrial operations taxed at the county level. There are, however, some industrial operations taxed by the state, such as railways, airlines and car rental.
Industry wants state authority
Many wind and solar farms in Wyoming want their tax assessment to go to the state.
“We hope this bill will pass, but we also hope the state will continue to make a decision,” said Walter Eggers of the American Clean Power Association.
Eggers said IPPs should be evaluated by the state because their facilities are very similar to those used by other utilities. He asked the state to take back the power of assessment for the upcoming tax year in 2023.
The bill returning that power to the state advanced with an 8-5 vote.
In September, Wyoming appraisers voted to contract out appraisals of properties held by IPPs to Texas-based engineering firm Thomas Y. Pickett, which will be responsible for appraising these properties during the next tax year.
Converse County assessor Dixie Huxtable and Sweetwater County assessor Dave Divis and president of the Wyoming County Assessors Association spoke against the bill. Divis mentioned a trona mine west of Green River as an example of a standard industrial facility rated by TY Pickett.
“This is an extremely complicated heavy industrial facility that our evaluators have been working on for decades,” Divis said.
He drew a comparison to a new solar farm in Sweetwater County that he says is much less complicated and county evaluators are able to assess it.
What is fair?
Divis told the Cowboy State Daily that he wasn’t as surprised by the vote as he was by the number of lobbyists at the State Capitol on Thursday.
Divis said he was unsure whether the independent power industry was paying its fair share of tax dues. Information about how the state calculates its ratings is considered confidential.
A 2021 bill that would have allowed state raters to share data on independent power producers with counties did not pass. During the last legislative session, two bills that would have returned the power of assessment to the state were also blocked.
Perception versus reality
Divis said a local solar facility initially told him it would bring in $17 million in tax revenue over a 30-year period, which is the life of the project. Now Divis has state data that suggests the total is closer to $4 million.
“As evaluators, we have concerns,” he said.
Huxtable said similar discrepancies occur with residence fee appeals.
“Do I think that’s prudent?” Absolutely,” she said.
Local schools, fire and hospital districts, and other public agencies receive a significant portion of their funding through property tax assessments. Divis said the seven counties in Wyoming with IPPs were already under contract with TY Pickett for many industrial facilities in their counties, so adding IPPs to those contracts resulted in only a “nominal” increase.
“Is the cost to the taxpayer of having all the appraisers under contract with a private company worth what we already get with the Ministry of Revenue which costs the taxpayer much less?” asked State Representative Dan Zwonitzer, chairman of the Corporations, Elections and Political Subdivisions Committee.
Huxtable said TY Pickett was already appraising 70 other properties in his county and the other six counties already had a contract with the company.
John Espy, a Carbon County commissioner, said the DOR rejected Carbon County’s offer to provide the state rating numbers of its local independent power producers, which Espy said does not do not match state assessments.
The state provides county assessors with their assessment numbers, but no explanation as to how it arrived at those numbers. Assessors do not have the authority to dispute or adjust these figures for final assessments.
Huxtable said it was ready to assess its county’s five independent power producers in January and had already begun work toward it.
Sen. Tara Nethercott, R-Cheyenne, introduced the proposal to grant county assessors the right to appeal state assessments.
Angela Pitale, senior tax policy adviser at MultiState Associates, a lobbying firm, said Nextera Energy, a major wind and solar producer in Wyoming, would oppose it.
“If evaluators had the ability to appeal, the actual taxpayer would be excluded from this process,” she said, adding that the bill goes further to give evaluators rights than any other wind or solar state. .
Case described the amendment as a “frontage.”
“I think the counties are better off with this assessment than they are not,” she said, adding that they will have better power to discuss this information with ratepayers.
Pitale said Nextera is Wyoming’s sixth-largest non-mining property tax generator. Over the next 30 years, the company will pay $250 million in landowner payments and hundreds of millions in Wyoming tax revenue for just two projects.
“We need to allow for a stable tax structure which is essential to enable such investments,” Pitale said.
Pitale said wind farms can be treated differently from county to county and discourage investment.
Apples to apples?
Alan Minier, former chairman of the Wyoming Public Service Commission and the State Board of Equalization, discussed the planned 26,000-acre Rail Tie wind farm project in Albany County.
The project is supposed to last 35 years, but by year 25 it is expected to return to a near base, leaving a minimum assessment for the last 10 years of the project. Minier said a similar project under PacifiCorp, a major energy producer in Wyoming, would not be allowed to waive assessments for 10 years.
“If they were a regulated utility, they wouldn’t be estimating depreciation on that base,” he said.
Minier said this valuation method came from the DOR. County assessors are a more reliable source than the state because they have more staff.
“The system is not working properly at this point, in my estimation,” he said. “There are ways I could see it going wrong.”
Huxtable also said independent power plants retain the ability to appeal an assessment, a right she says is a positive feature that contributes to transparency and accuracy. There has not been a single appeal filed by these producers in the past 10 years.
“As healthy as calls are, they cost time, money, resources — all at taxpayer expense,” Zwonitzer added.
Case disagrees, citing language preventing officials from disclosing information to the general public.
The amendment was adopted by 6 votes to 5.
“Overall, why are we doing this? Case requested. “What are we afraid of, and why are we trying to carry wind water at all costs in this committee?”