Oklahoma legislators again seek wind cuts
After failing in an earlier attempt to cut state support for wind energy, Oklahoma lawmakers are trying again, proposing caps on previously awarded tax credits for the wind industry.
Those caps would lower the cumulative amount wind projects could claim from more than $70 million to no more than $10 million, a cut that could push operating wind farms, which relied on the tax credits to gain financing, into bankruptcy, said Mark Yates, the head of the Oklahoma Wind Coalition, which lobbies for the industry.
“It is just absolutely devastating to go back and try to change any of this,” Yates said in February.
Oklahoma, with 7,495 megawatts, is second only to Texas when it comes to wind power. Until recently, the state had aggressively courted renewable energy companies, luring them with two main incentives — a five-year exemption for local property taxes and a tax credit for zero emissions electricity
generation.
Fifteen years after creating the incentives, the wind industry is the largest taxpayer in 14 Oklahoma counties, most of them rural, and generates about 9,000 direct and indirect jobs in the state, according to the Wind Coalition.
But the wind industry’s tax incentives have come under fire as Oklahoma legislators have been scrambling to fill two massive budget holes, a $600 million one in the current budget and an $878 million one in the budget for the next fiscal year, which begins July 1. Oklahoma’s financial problems mostly stem from an oil bust that hammered a state budget that gets nearly a quarter of its revenue from the oil and gas industry.
Supporters of limiting wind power subsidies have also sought to increase taxes paid by oil and gas companies. They say both industries need to contribute to the state’s tax revenue by surrendering breaks they may not need, particularly as wind projects become more competitive and the oil industry recovers from its slump.
If Oklahoma caps tax credits for wind farms at $10 million, it expects to save more than $63 million in tax revenue in 2021, the first year that the cap would have an effect. Texas, which has thriving wind industry, has no state-level incentives for wind farms.
In a bid to gather widespread support for tax hikes, a coalition of Oklahoma business leaders created a tax revenue plan to narrow the budget gaps that would have imposed higher taxes on the state’s oil and gas industry as well as the wind industry. That plan proposed a production tax credit for wind farms in addition to a cap on zero emissions tax credits, but the plan was scuttled in the Oklahoma House last month when it failed to gain the threefourths majority needed to approve tax increases.
House Bill 3069, which caps the tax credits at $10 million, passed out of the Legislature’s House Rules Committee earlier this month. Senate Bill 1035, which caps credits at $5 million, also passed out of the Senate Appropriations Committee. This week, the state Senate introduced another bill that would end all zero emission tax credits for new solar projects — as it killed them for wind farms — by Dec. 31, 2018.