Wind industry says state’s tax policy a deterrent

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A  joint venture of Ohio-based Worthington Industries, Inc., and Spanish manufacturer Gestamp Renewables will build a new wind tower manufacturing plant at the Cheyenne Logistics Hub at Swan Ranch in Cheyenne.

The $40 million plant will manufacture about 300 wind towers annually and employ about 150 workers, according to the companies. The manufacturing plant may help reduce project development costs for companies planning to develop wind farms in the region, which in turn could bolster the economics of building large interstate electrical transmission lines from Wyoming to metropolitan areas of the West.

“You’re just in a great spot for future growth,” Worthington Global Group president Ralph Roberts said during a press conference in Cheyenne this morning.

Construction of the manufacturing plant is expected to begin this spring, with plans to begin shipments of the 80- to 100-foot long tower sections during the first quarter of 2012.

Gestamp Worthington chose Cheyenne over several North American communities in large part due to the logistics of having access to two interstate highway systems that intersect in Cheyenne, as well as access to the BNSF Railway and Union Pacific rail systems, said Roberts.

Wyoming also offered Gestamp Worthington an incentive package that includes about $450,000 in workforce training, $15.5 million in industrial revenue bonds and a sales tax exemption for manufacturing. Roberts said the workforce training money was essential to choosing Wyoming, adding that while the emphasis will be to hire local workers, many of the workers may be trained at existing facilities in Europe.

Wyoming Gov. Matt Mead announced the deal at a press conference this morning at the State Capitol. He said the deal has been in the works for about a year, and it was led by the Wyoming Business Council, Cheyenne LEADS and Granite Peak Development, LLC. Mead said the success in attracting Worthington Gestamp to Wyoming illustrates an “open for business” attitude in the Cowboy State.

“The welcome mat is out for businesses both small and large,” said Mead.

Yet companies hoping to erect more wind turbines in Wyoming say the state is sending mixed signals. A sales tax exemption for commercial wind development will expire at the end of this year, and a new $1 per megawatt hour excise tax will go into effect in 2012.

The industry, along with pro-wind landowners and many Wyoming businesses, pushed for a bill that would have combined the excise tax and sales tax, and created a $15 million impact assistance fund for Wyoming communities. A key component of the bill would have delayed taxation until after a wind farm goes into production. Supporters said the bill would generate more revenue to the state over time because developers could avoid having to finance the upfront sales tax, but opponents disagreed that the formula would actually result in more tax revenue to the state.

The bill died in a 29-29 vote on the House floor last week, and an effort to revive the bill failed.

Cheryl Riley, executive director of the Wyoming Power Producers Coalition, said Wyoming’s mixed taxation between wind tower manufacturing and wind farms may result in Wyoming-made wind towers going to out-of-state projects.

“Today’s announcement (the wind tower manufacturing plant) is great for the state. But we would like to see wind towers delivered to projects in Wyoming and not elsewhere,” Riley told WyoFile.

The Cheyenne manufacturing plant represents the first joint venture between Worthington and Gestamp. Gestamp’s core business is steel manufacturing for the automotive, wind and solar industries. Worthington Industries bills itself as a world leader in value-added steel processing, manufacturing steel cylinders used to hold propane, oxygen, helium and other gases.

Wind developers have added about 1,000 megawatts of new wind energy capacity in Wyoming in recent years, and industry leaders say they want to add another 12,000 megawatts or more to meet increasing demand for renewable energy across the West. During the recent boom in wind energy development, Vestas Wind System built three wind turbine factories in Colorado, employing about 1,000 workers.

Contact Dustin Bleizeffer at dustin@wyofile.com or 307-577-6069.