Wyoming weighs a power tax as data center plans could triple the state's electricity demand

As new energy generation starts mounting up in Wyoming, proposed "pay-to-play" schemes are cropping up, too.

The state's lawmakers are weighing whether taxing electricity producers could lower what customers pay each month, while also helping the state respond to the huge power needs that future data centers might bring, as WyoFile reported.

What happened?

During a recent meeting of the Legislature's Revenue Committee, Sen. Cale Case reportedly presented two related tax ideas. One would move more of the burden from ordinary ratepayers to power generators, and another would target electricity generation built for very large users.

In the meeting, Case suggested that rising electric rates are squeezing customers across Wyoming, while some areas are also having trouble securing more power. "These are all kind of connected, and taxation policy is a tool that we could use to address some of these issues," he told the panel, according to WyoFile.

Under one concept, utilities would be taxed for generating electricity, while the retail sales taxes customers now pay on power could be reduced or eliminated. Case also said lawmakers could shape that tax policy to favor some energy sources over others, per the outlet.

WyoFile revealed the other proposal is aimed at various types of generators built for massive new "large load" users, including data centers. Case said some developers are considering projects large enough to require three times the electricity Wyoming currently uses.

Why does it matter?

For most people, the most pressing issue is whether shifting some of the tax burden away from end users could ease monthly electric bills.

Opponents, however, say those added costs could still make their way back to customers if utilities respond with higher rates.

Lawmakers are also looking at how much value Wyoming keeps from the electricity generated in the state. WyoFile noted that about 65% of that power is exported, and there is some resistance to the rapid growth of renewables in the area.

Case also told the outlet that if data-center-related tax revenue ends up concentrated in a single county, it could worsen regional disparities instead of benefiting communities statewide.

What are people saying?

WyoFile noted that there was some question over whether residents are properly recognizing how much renewables are already contributing to the state. 

There was also debate over whether a tax that targeted new wind generation could be branded as "discriminatory."

On the data center front, Case argued to the panel that gains from these centers should filter throughout the state.

"We need stable funding for local governments around the state," he suggested, according to the publication. "It's not really fair that [revenue] windfalls accumulate in one area."

Put together, Case framed the twin proposals as both an energy and growth issue. 

"It's a policy tool that will moderate the growth of renewables in Wyoming," he said. "It is a policy tool that could potentially moderate the rapid growth of data centers."

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.