There are a lot of energy-related bills in this year’s Wyoming legislative session. Two have received a lot of public outcry recently. One would roll back electricity sales tax, which could cripple small towns, as it’s a revenue they depend on. Another would likely make it more expensive to have rooftop solar. Opponents say it’d remove most of the incentives to use the technology. Wyoming Public Radio’s Caitlin Tan and WyoFile’s Dustin Bleizeffer break the proposals down.
Editor's Note: This story has been edited for clarity and brevity.
Caitlin Tan: So let's start with SF 128, ‘Repeal of sales tax on electricity’. Dustin, you’re following this issue, tell us about the stakes. It sounds like they're pretty high?
Dustin Bleizeffer: So the rising cost of electricity has been on minds for the past couple of years due to a series of rate hikes, and it doesn't look like monthly utility bills are going to level out anytime soon. So lawmakers are scrambling to try to find ways to help.
With SF 128, that would basically eliminate a sales tax on electricity. Presumably, it would save ratepayers more than $40 million a year. But the problem with that, according to opponents of the measure, is that $40 million a year would no longer go to local governments. One person who testified was Evansville Police Chief Mike Thompson. Evansville [home to about 2,700 people] happens to be home to an oil refinery and the sales tax that they pay for electricity is a crucial chunk of revenue for the town.
Mike Thompson: I think this is a very dangerous bill to potentially push through.
CT: Thompson is saying that between this bill and another property tax bill, small towns like Evansville will lose a lot of public services.
MT: That will cost us our fire department. That's going to cost me at least two police officers. That's going to cost us public works people, so when we lose our full time fire department, that's going to cost all the homeowners within the fire protection districts’ insurance costs to go up, essentially.
CT: Dustin, how did the committee of lawmakers hearing this bill grapple with what Thompson was saying?
DB: Some of the lawmakers really understood, because they've been having a similar conversation with towns and counties regarding overhaul of property taxes, and it's going to mean less revenue, and they're [small towns] already struggling to provide essential services.
To be clear, not every lawmaker on the panel was sympathetic to that concern, but I think the fate of this bill will hinge on whether or not a sort of companion bill is successful, and that's HB 300. That bill is intended to offset the revenue losses from removing the sales tax that consumers pay and shift that tax burden onto electric utilities and potentially their customers outside of Wyoming. But there's huge questions about the legality of doing that and whether such a tax is prohibited under things like the Interstate Commerce Clause.
CT: Dustin, let's switch gears to SF 111, ‘Net metering revisions’. This is mostly targeting rooftop solar users, right?
DB: That's right. So this is an attempt that keeps coming back to the legislature, and usually it is shot down. I think it's fair to say that it's a bit of a personal mission for Sen. Cale Case (R-Lander). So his concern is that by earning credits for electricity that small rooftop solar arrays sometimes pump back into the grid, those customers are not paying an equal amount for fixed costs, things like power lines and other equipment necessary to deliver electricity to all customers.
CT: Can you just remind us how things work right now with net metering?
DB: So at the most basic level, if you have rooftop solar on your home, usually that's just offsetting how much electricity that you're pulling down from the grid so you're saving money. But sometimes in the summer, the solar arrays will provide enough electricity than the home needs, and even extra. So that extra electricity can be pumped back into the grid, and that customer is compensated for that electricity that the utility gets to sell somewhere else – that's net metering.
The compensation rate, on a month-to-month basis, is a one-to-one ratio on whatever that kilowatt hour price is. But, if a customer has a lot of extra credits at the end of the year, the utility only compensates them at the wholesale rate, which is much lower. That's kind of a safeguard to make sure that rooftop solar users aren't trying to game the system, which many, many folks say, if you're building rooftop solar on your home to try to get in the business of selling electricity, that's really not going to work out, like, you're never going to pay off the investment you made.
CT: So then what this bill is trying to get at is that concern of a cost shift – that as we see more people go to rooftop solar then less people will be paying to upkeep infrastructure of the power grid, raising rates than for non-rooftop solar users. But many stakeholders have testified time and time again that's not happening.
DB: Every electric customer pays a sort of base rate to account for those infrastructure costs. A lot of people across the board do agree that technically, there could be some shifting of costs to those without rooftop solar, but it's so minuscule that it's really difficult to even identify. You've reported that less than 1% of Wyoming homes have rooftop solar and that any significant cost shift doesn't really happen until there's about 5 to 10%, and that's not likely to happen in Wyoming anytime soon. But there's a ton of passionate opposition [to the bill] every year.
CT: It definitely felt like people were pretty frustrated this year that this keeps coming up.
DB: They are frustrated that it keeps coming up. There's tons of opposition to any sort of tinkering with Wyoming's net metering law as it currently exists.
CT: Dustin, you reported that in this year’s bill, Sen. Case “sweetened the pot” by grandfathering in current rooftop solar users. That's a new addition this year.
DB: Yeah. But that hasn't appeared to change any minds. Some people who testified noted that when they have rooftop solar on their homes, that increases the value of their homes when they turn around to sell their house. But it doesn't appear that this grandfathering clause would apply to the new owner, and that could amount to a taking.
CT: Committee lawmakers ultimately moved the bill forward. So Dustin, any thoughts on this bill's fate? It's gotten this far before.
DB: Sen. Case made a real plea at the end of the discussion to pass this bill now, because he senses that more and more people are interested in rooftop solar. So if they wait until next year, there will just be more people opposing this. So I thought that was pretty telling.
CT: Dustin, you've been covering energy and natural resources in Wyoming since the late 90s. I'm curious if there's anything else you're keeping an extra close eye on this year in the legislature? It definitely feels heavy in the energy world.
DB: Yeah, there's two or three dozen bills I'm trying to track when it comes to energy and the dynamic between energy and the environment.
There was a hugely controversial bill to allow temporary storage of nuclear fuel waste in the state [HB16, ‘Used nuclear fuel storage-amendments’], but that just died in committee on Wednesday.
I'll be tracking a handful of bills that would give tax breaks to the oil and gas industry to the tune of tens of millions of dollars, and to the coal industry, which already got a $10 million a year tax break a few years ago.
CT: That's notable, right? Because Wyoming's looking at revenue, and if we see tax breaks, that could change that.
DB: Yeah. So when it comes to a lot of our traditional energy industries and energy that Wyoming's trying to court, tax breaks seem like a really good idea, until they start to hear from the cities and towns who would end up losing that revenue. So it's a tricky situation.
CT: Okay, well, it'll be interesting to see how this is all gonna shake out. Dustin, thank you so much for talking with us.
To see Dustin’s reporting on SF128 click here and SF111 click here. All of his reporting can be found here.
