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New West Daily Roundup for July 20, 2016

Today in New West news: wind power in Montana and Wyoming, Colorado business groups counter proposed minimum-wage hike, and Cheyenne Regional Airport to receive $850K in federal funds.

According to the Billings Gazette, development on a proposed wind farm in Big Timber, Montana has been stymied after state regulators released new power rates. Developer Greycliff Wind Prime told the Gazette that the set rate ($45.49 per megawatt hour) is 16 percent less than what Greycliff says would make the farm profitable. Greycliff previously proposed the 25-megawatt farm seven years ago. From the Gazette:

“It’s not a rate that works. It’s also not a rate that’s realistic,” said Steve Tyrell, a Greycliff stakeholder.

Greycliff needed a price in the mid-$50s, which would have been similar to the wind energy rate for Spion Kop Wind Project, a NorthWestern renewable energy source.
No wind project has been built in the past 10 years at the price set by the PSC, said Ryno Stinchfield, a Greycliff Wind developer.

Renewable energy projects are on a two-month losing streak with the Montana Public Service Commission. In June, Montana’s Public Service Commission pulled the plug on guaranteed rates for small solar projects at the request of NorthWestern Energy.

Montana’s largest regulated utility, NorthWestern argued that Montana’s pre-set rates for small renewable energy prices were too pricey for NorthWestern customers. NorthWestern had received 97 solar hookup requests since January 2015. The PSC decision cut the number of viable solar farms to fewer than 10.

An unwilling buyer and a state regulator concerned about renewable energy prices have hobbled Montana wind and solar projects, despite a 38-year-old federal mandate that requires states to promote alternative energy.

States are required to set a price and contract lengths to promote alternative energy resources under the Public Utility Regulatory Policies Act, or PURPA. But the PSC and NorthWestern are balking at the mandate.

Bozeman public service commissioner Roger Koopman believes blame for the project’s current predicament (and previous mishaps in implementing more renewable energy in the state) lies with PURPA.

Down in Wyoming, we previously reported that Governor Matt Mead had pleaded to the Legislature not to raise the state’s wind-generation tax, which could potentially jeopardize the already long-gestating Chokecherry and Sierra Madre Wind Energy Project, a 1,000-turbine farm planned by Denver-based Power Company of Wyoming (PCW). According to the Wyoming Business Report, in a spot of good news for Mead and PCW, Carbon County commissioners voted unanimously to keep the wind tax at its current level ($1 per megawatt hour):

Prior to the vote, Roxane Perruso, PCW’s vice president and general counsel, provided an update on how, if successful, any increase could potentially kill or delay the construction of the company’s proposed Chokecherry and Sierra Madre Wind Energy Project (CCSM) south of Rawlins.

“Early in May, we made, what for us and I think for the county as well, was a pretty exciting announcement that we were going to begin construction by the end of the year,” Perruso said.

“We made that decision knowing that we were taking some risks. The main risks that we took into account were… we don’t have all the permits yet — although we are closing in on that and expect to have all of the permits for Phase I of the wind farm by the end of the year — and that we don’t have any power purchase agreements in place.”

However, within days of PCW’s announcement that after more than nine years of chasing local, state and federal permits construction was imminent, the Wyoming Joint Revenue Committee at its May 11-12 meeting dealt the project a “significant blow.”

During this meeting, the committee directed the Legislative Service Office (LSO) to draft two bills that would increase taxes on wind.

One bill would seek to increase the current tax of $1 per megawatt hour of wind produced in Wyoming with the second bill requiring wind companies to provide a portion of the federal Production Tax Credits they receive. Some reports have set this amount at perhaps as much as $12 per megawatt hour.

“I will go out on a little bit of a limb and say the more likely scenario the Revenue Committee will look at is an increase in the dollar of megawatt hour,” Perruso said. “I think in the end that’s probably what will be on the table.”

Though the committee would decide on the exact amount of the increases at a later date, all of the uncertainty at best may delay the start of construction of CCSM until 2017, and at worse force PCW to abandon its $5 billion wind project.

“This has added a new level of uncertainty. We are still moving forward to get everything into place. To start construction and do the initial work on the infrastructure, while now also seeking to keep the taxes on wind at their current level,” Perruso said.

“It’s a little bit of a fairness issue since we need certainty, and we thought we had certainty. We certainly have been counting what we had estimated our taxes were going to be.”

It is estimated the CCSM project will pay more than $780.5 million in combined taxes, including property tax, sales and use tax and wind-generation tax during its initial economic life.

Over in Colorado, according to the Denver Business Journal, a coalition of business groups (including the Colorado Restaurant Association, the Colorado Association of Commerce and Industry, and the National Federation of Independent Business) has come out against a proposed minimum-wage hike expected to be on the ballot come November. The group, entitled “Keep Colorado Working,” is expected to announce more members in the coming weeks, according to campaign manager Tyler Sandberg. From the DBJ:

It will focus much of its messaging on how the proposal would affect small businesses and businesses in rural Colorado, [Sandberg] said.

Colorado Families for a Fair Wage launched its campaign two months ago and is collecting signatures to put on the statewide ballot a constitutional amendment that incrementally would raise the minimum wage to $12 an hour by 2020.

Supporters say that boosting the floor pay level for all employees in the state from its current level of $8.31 an hour would allow more working people to move off of public assistance and would provide a spending boost that would ripple throughout the economy.

Leaders of the Keep Colorado Working effort argue, however, that the proposal is an extreme one, especially after a 2006 voter-approved minimum-wage hike has upped the bottom level of pay by 61 percent in the past 10 years.

And while they acknowledge that the issue is a popular populist cause that is likely to draw people to the polls — both presumptive Democratic presidential nominee Hillary Clinton and her former challenger, Bernie Sanders, supported a national minimum-wage hike in their campaigns — they believe that they can reach voters by explaining what they say is the negative impact on local companies.

[…]

CRA leaders will be arguably the driving force behind the campaign because that industry is likely to be affected more than any other. While the measure would raise the minimum-wage 44 percent in most industries over the next four years, it would bump the minimum for tipped workers in eateries 70 percent, as their pre-tip minimum pay would go from $5.29 per hour to $8.98 per hour, with a $3.02 tips credit staying the same.

Finally, back in Wyoming, the Cheyenne Regional Airport will receive $850,000 in federal money during the 2017 fiscal year to improve the facility. According to the Wyoming Business Journal, while it still requires approval (and a signature) from President Obama, employees and affiliates of the airport are elated:

“It’s great news; it’s excellent news,” Jim Schell said of the bill. He is the deputy director of aviation at the Cheyenne airport.

“We’re glad that – albeit a bit later than we had hoped – Congress has passed the bill,” he said.

The money will help build a new passenger terminal at the airport.

The Federal Aviation Administration provides rural airports with $1 million per year if they meet certain passenger requirements.

They must have 10,000 enplanements a year, which means 10,000 passengers who leave from the local airport.

Airports that miss the mark get $150,000.

Cheyenne met the standard year after year until 2015, when its enplanements fell well below 10,000.

The reason was because Great Lakes Airlines, the commercial air service for Cheyenne, experienced a drastic decline in flights.

Great Lakes officials said the drop occurred because of a pilot shortage brought about by new federal flying time regulations for regional airline pilots.

U.S. Senator Mike Enzi (R-WY) also celebrated the initiative, although Schell told the WBR that the funding, however welcome, “is a temporary fix for a systematic problem,” endemic to many regional airports across the nation.

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