FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 07:24 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1358 |
Introduced |
SB82 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
Counties
Sources of Revenue:
Other Fund Counties
Legislation creates:
Creates New Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to establish a tax on the production of electricity from wind and solar collection for distribution to the counties to be distributed to the volunteer fire departments in that county.
This bill would impose an excise tax on the production of electricity from wind and solar resources. The tax would be paid by the entity producing such electricity on each megawatt hour of electricity at the point of interconnection with a transmission line. The tax rate would be established at $3 on each megawatt hour which is produced in the state beginning on January 1, 2027. There exists an exemption for those facilities that are owned or operated by the federal government, the state of West Virginia, or any county or municipality in the state. Tax proceeds would be distributed to all 55 counties based upon the number of volunteer fire departments in the county.
According to data provided by the Energy Information Administration, West Virginia generated 2.1 million megawatt hours of electricity from wind resources, and 268,000 megawatt hours of electricity from solar resources in 2024. Wind and solar power plants in West Virginia already pay an average of $1.3 million in State Business and Occupation Tax on generation capacity each year. According to our interpretation, passage of this bill would create an additional power generation tax on wind and solar plants resulting in an increase in revenue of approximately $2.8 million during the first six months of FY2027 and $6.8 million in subsequent fiscal years, before its distribution to the counties.
Administrative costs incurred by the Tax Division would be $95,970 in FY2027 and $44,820 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
95,970 |
44,820 |
| Personal Services |
0 |
44,820 |
44,820 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
49,500 |
0 |
| 2. Estimated Total Revenues |
0 |
2,800,000 |
6,800,000 |
Explanation of above estimates (including long-range effect):
This bill would impose an excise tax on the production of electricity from wind and solar resources. The tax would be paid by the entity producing such electricity on each megawatt hour of electricity at the point of interconnection with a transmission line. The tax rate would be established at $3 on each megawatt hour which is produced in the state beginning on January 1, 2027. There exists an exemption for those facilities that are owned or operated by the federal government, the state of West Virginia, or any county or municipality in the state. Tax proceeds would be distributed to all 55 counties based upon the number of volunteer fire departments in the county.
According to data provided by the Energy Information Administration, West Virginia generated 2.1 million megawatt hours of electricity from wind resources, and 268,000 megawatt hours of electricity from solar resources in 2024. Wind and solar power plants in West Virginia already pay an average of $1.3 million in State Business and Occupation Tax on generation capacity each year. According to our interpretation, passage of this bill would create an additional power generation tax on wind and solar plants resulting in an increase in revenue of approximately $2.8 million during the first six months of FY2027 and $6.8 million in subsequent fiscal years, before its distribution to the counties.
Administrative costs incurred by the Tax Division would be $95,970 in FY2027 and $44,820 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to establish a tax on the production of electricity from wind and solar collection for distribution to the counties to be distributed to the volunteer fire departments in that county.
The title of this bill states an intention to tax production of electricity from both wind and solar, without defining either term, but at multiple points in the bill the tax base seems to not include electricity generated by solar.
The rate of taxation is stated as “$3 on each megawatt hour, or portion thereof, which is produced in this state,” without any statement that the rate applies only to electricity produced by wind or solar means. The $3 per megawatt hour tax is imposed “at the point of interconnection with an electric transmission line.” Because customers typically are not connected to a transmission line, the proposed tax would not be imposed on electric energy generated by a customer and sold to a utility through a net metering arrangement. The bill provides that “no tax may be imposed upon electricity which is produced for the personal consumption of the producer, including any excess production of electricity that does not exceed 500 kilowatt hours in any 24-hour period.” While this provision apparently recognizes the usual scenario involving net metering, it should be noted that the “transmission line” limitation would remove net metering from the equation anyway, even if excess production surpassed 500 kilowatt hours in a 24-hour period, since the personal consumer would not be interconnected with a transmission line.
Although section 1 of the proposed article states that the proposed tax is to be “imposed upon the production of any electricity produced from wind or solar resources for sale or trade on or after January 1, 2027,” the bill also provides that “[a]fter that date [three years after “the turbine or solar panels” first produced electricity for sale] the production shall be subject to the tax, as provided by this article, regardless of whether production first commenced prior to or after January 1, 2027” (emphasis added). This language can be confusing regarding the true effective date of the tax – if the production of electricity by wind or solar started in 2021, it could be argued that the tax should be imposed on such electrical production starting in 2024 rather than 2027.
The bill does not establish a special account into which the tax receipts should be deposited, but it requires that tax proceeds shall be distributed to all 55 counties based upon the number of volunteer fire departments in the county. The bill further requires that the counties then distribute the taxes “to all volunteer fire departments that were in compliance with the Open Checkbook policy for the tax year that the taxes were collected by the state from the wind and solar energy producers.” It is apparently assumed that distribution by the counties would be limited to the volunteer fire departments in that county.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov