Wyoming lawmakers mull electric generation tax to address average customers’ rising bills
Wyoming lawmakers are considering a new tax on electricity generation, including facilities for data centers, as a strategy to ease rising electric bills for residents and generate state revenue. The proposal also aims to potentially moderate the growth of data centers and renewable energy. Attorneys are evaluating the legal implications, particularly regarding the federal Dormant Commerce Clause.
Wyoming lawmakers are debating a new electricity generation tax, which could specifically target facilities powering data centers, to alleviate rising utility costs for average customers and generate state revenue. The proposal, led by Lander Republican Sen. Cale Case and reviewed by the Legislature’s Revenue Committee, is also seen as a tool to potentially moderate the rapid growth of data centers and renewable energy projects in the state. Case highlighted that various Wyoming customers, including homeowners and industries, face continuous rate hikes, and some areas struggle to secure timely power.
The proposed legislation could shift the tax burden from retail sales taxes paid by customers to utility companies generating electricity, with the flexibility to differentiate tax rates, for instance, favoring nuclear or fossil fuels over wind energy. Legal experts, including attorney Robert Kantowitz, suggest a narrowly applied generation tax in Wyoming would likely withstand challenges under the federal Dormant Commerce Clause. However, Nikolas Stoffel of Holland and Hart, representing the Wyoming Industrial Energy Consumers group, cautioned that such a tax could negatively impact providers' creditworthiness and ultimately lead to higher rates for customers.
Power Company of Wyoming Vice President of Communications Kara Choquette defended wind energy, noting its substantial contributions to state coffers through existing taxes and property taxes, and highlighted new federal revenue-sharing from wind development on federal lands. Senator Case also proposed a second measure for "large load" producers and/or customers, specifically mentioning data centers, which could demand triple the state's current electricity consumption. He argued this could create a new revenue stream to be distributed statewide, rather than revenue concentrating solely in counties like Laramie, which host most data center construction.
The Revenue Committee has directed staff to draft the proposed bills and is scheduled to reconvene in August to continue discussions.