No new wind energy projects in gusty Wyoming in 2012 – Casper Star

May 28, 2013 by  
Filed under Green Energy News

Wyoming’s wind energy industry didn’t add wind farms in the state last year despite a landmark year for the industry at large and enormous wind potential that ranks the Cowboy State among the windiest in the nation.

A new study from the American Wind Energy Association names Wyoming as one of seven wind-producing states that didn’t add to its wind-generated power in 2012.

Industry movers and shakers say that’s no surprise.

They cite insufficient transmission capacity, an unparalleled state tax on wind energy production, uncertainty in the federal tax structure and lengthy permitting processes as reasons why Wyoming added no new wind-generated electricity to its grid in 2012.

Nationwide, the industry boomed. Wind producers in the United States added in a single year the amount of energy capacity it took the industry 25 years to achieve. For the first time, wind power surpassed natural gas as the nation’s single-largest source of new energy, comprising 42 percent of new electricity put to market last year.

Nearly 7,000 new wind turbines were turned on in the U.S. in 2012. None of those turbines were built in Wyoming, where wind potential ranks eighth in the nation but big wind projects have yet to come on line.

Transmission lacking

Growing demand for electricity has strained transmission capacity in Wyoming, creating a conundrum for current and would-be producers in the energy exporting state.

It’s a major hurdle for wind developers to find available transmission in Wyoming, said Jeff Hymas, a spokesman for the Rocky Mountain Power division of Portland, Ore.-based PacifiCorp. PacifiCorp supplies power to 1.7 million customers in six states, including Wyoming.

“It’s been 20 or more years since there’s been any major upgrade to the transmission lines in the West,” Hymas said. “Having new transmission in place would certainly make new wind projects a more viable option in Wyoming.”

PacifiCorp is six years into the permitting process for its $6 billion Energy Gateway initiative, a transmission project designed to open new capacity on an electricity transmission system now straining to keep up with growing demand. The Bureau of Land Management recently released its final environmental study of the Gateway West transmission line, a 1,100-mile route from Glenrock to southwest of Boise, Idaho, meaning that part of the project could be approved later this year.

“Our transmission grid is at capacity,” Wyoming Infrastructure Authority Executive Director Loyd Drain said. “They’re telling these people, ‘Look, we don’t have it.’ ”

Transmission is critical to any energy entrepreneur in population-sparse Wyoming, where most energy produced or extracted will be transported and consumed out of state.

“We still remain stranded here with this resource,” said Dave Picard, lobbyist for the Wyoming Power Producers Coalition. “We have no way to get it to market.”

Picard called the Gateway West project “the next great hope” for independent power producers in Wyoming. Power companies wanting to transmit electricity on the PacifiCorp lines can request to do so, said Hymas, the PacifiCorp spokesman.

One-and-only wind tax

While hailed as equalizing the playing field among wind producers and the state’s other taxed extractive industries, Wyoming’s one-of-a-kind wind production tax may have actually driven away companies considering Wyoming for wind development.

Two years ago, the Wyoming Power Producers Coalition lobbied on behalf of 19 member companies. Those 19 companies paid a combined $5 million to Wyoming landowners that year for the right to test wind potential on their land, said Picard, the group’s lobbyist.

Today, the coalition represents six companies. What was once a total of $5 million in private landowner lease payments has “mostly evaporated,” Picard said, to less than 10 percent of what it was at its height in 2011.

Companies left Wyoming without developing their projects, he said, citing the lack of nearby customers and transmission as well as what they called an unfavorable tax climate in Wyoming.

“Wyoming is just not competitive when it comes to making a profit [in wind],” Picard said. “They will take their development dollars and yearly investments to where it makes the most sense.”

The $1-per-megawatt-hour tax, signed into law in 2010 and levied on wind produced at project sites older than three years, generated about $2.6 million for the state and some county governments during its first year of existence.

Revenue from the tax is expected to increase as projects enter their third year. PacifiCorp alone expects to pay $2 million in wind production taxes by 2014.

But looking short-term at the wind industry in Wyoming, the upcoming year looks calm.

“It’s not that there’s not interest,” said Luke Esch, administrator of Wyoming’s Industrial Siting Division. “We’re in constant discussion with potential wind developers.”

There are companies “testing the waters” for wind development in Wyoming, Esch said, but none with construction plans that would need the division’s approval anytime soon.

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