Wind turbines-royalty fee.

09LSO-0284.L3

FISCAL NOTE

	FY 2010	FY 2011	FY 2012
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
GENERAL FUND	0	0	3,035,894

Source of revenue increase: 3% royalty on sale of wind-generation production for sale or trade. 

Assumptions:

1.  The BLM imposes a royalty on the placement of any wind turbine on federal land and the governor certifies that fact to the Department of Revenue during 2009.

2.  Current installed nameplate capacity of 459MW.  (Source for installed capacity: http://awea.org/pubs/factsheets/Market_Update.pdf )

3.  10% annual growth in installed nameplate capacity and annual kWh wind-generated electricity production.

4.  40% capacity factor, $.052/kWh sales price.

At 40% capacity factor 1,946,086 MWh or 1,946,086,000 kWh per year.

(1,946,086,000kWh 2011 production * $.052 (2007 weighted average retail price for Wyoming) = $101,196,472* 3% royalty = $3,035,894)

5.  No penalties assessed.

6.  Renewable-source power can be sold separately from an associated renewable energy credit.  For the purposes of this impact estimation, the royalty is only being applied once to each kWh.

NOTE- The PSC has very limited information on actual current sale prices for wind-generated electricity, as non-utility wind generation is not reported to the Commission.  The rate used here (5.2¢/kWh) is the weighted average retail price for electricity consumed in Wyoming.  It includes a variety of generation types, and transmission and distribution costs.  The inclusion of these costs and lower cost baseload coal generation is balanced to some degree by a renewable energy premium that presumably exists.  That premium is, in the absence of a developed market for renewable energy credits, difficult to estimate. 

Actual rates for wind-generated power would likely exceed 5.2¢/kWh under some circumstances, such as wholesale transactions to supply wind-generated power to utilities in other states where mandatory renewable portfolio standards are in force.  The current average cost of wind-generated power is most likely slightly more than 7¢/kWh before applications of the federal Renewable Energy Production Tax Credit of 2.1¢/kWh. 

NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED

This bill has administrative impact that appears to increase duties or responsibilities of one state agency and may impact agency spending or staffing requirements. As introduced, the bill does not modify any state agency budget or current personnel authorizations.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

Public Service Commission

Prepared by:   Alex Kean, LSO     Phone: 777-7881

(Information provided by: Christopher Petrie, Public Service Commission Phone:777-5763)