Lawmakers mull electric generation tax to address average customers’ rising bills
Wyoming lawmakers are considering a new tax on electricity generation, including facilities powering data centers, to lower residential power bills and generate state revenue. Senator Cale Case proposed the measure, which faces legal scrutiny regarding interstate commerce regulations. The legislative Revenue Committee has directed staff to draft bills for further consideration.
Wyoming lawmakers are exploring a new electricity generation tax, which could impact data centers and wind energy producers, as a means to alleviate rising utility bills for average customers and create a new revenue stream for the state.
Senator Cale Case, a Republican from Lander, presented the proposal to the Legislature's Revenue Committee, highlighting the continuous rate hikes faced by various Wyoming customers and the challenges some industries and municipalities experience in securing additional power. Case suggested two potential bill drafts: one that would tax utility companies generating electricity while reducing or eliminating retail sales taxes, and another focusing on a tax for "large load" producers and/or customers, specifically referencing data centers that could demand triple the state's current electricity consumption.
The proposal aims to moderate the growth of renewables and data centers, but it faces legal challenges, particularly concerning the federal Dormant Commerce Clause, which prohibits excessive burdens on interstate trade. Attorney Robert Kantowitz of Sterlington Law advised that a narrowly applied tax on in-state electricity generation should withstand legal challenges, while Nikolas Stoffel of Holland and Hart, representing the Wyoming Industrial Energy Consumers group, cautioned against the tax, citing potential negative impacts on providers' creditworthiness and long-term costs for customers.
Kara Choquette, Vice President of Communications for Power Company of Wyoming, noted that wind energy companies already contribute significantly to state coffers through an existing $1 per-megawatt-hour tax and property taxes, with new federal revenue sharing from wind development on federal lands also starting this year. Despite concerns, the Revenue Committee has instructed staff to draft the proposed bills, with their next meeting scheduled for August.