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Industrial wind energy in Okla. to receive nearly $193 million in subsidies from state  

Credit:  April 21, 2014, Oklahoma Property Rights Association ~~

CLAREMORE, Okla. ‐‐ The Oklahoma Property Rights Association (OPRA), a 50‐member coalition of concerned citizens across the state, announced today state reports unveiling industrial wind energy farms in Oklahoma will cost an estimated $192,740,946 annually in state subsidies when announced construction has been completed.

According to information provided by Wind Energy Coalition and the Oklahoma Tax Commission, the wind industry stands to receive the following estimated annual state subsidies:

  • $88 million in Zero Emissions Tax Credits for the next 10 years
  • $61 million in Investment Tax Credits for the next five years
  • $43 million in Ad Valorem Tax Exemptions that would have supported local schools and municipalities. Companies receive a 5‐year exemption; and Oklahoma bears the cost for these exemptions through the Ad Valorem Reimbursement fund.

“In addition to the 26 existing wind farms, 15 new wind farms are being planned or built in Oklahoma that will cost taxpayers millions more. Instead of investing in education and other critical services, our state is squandering much needed funding on industrial wind companies,” said Frank Robson, founder of OPRA.

The state of Oklahoma currently doesn’t have a mechanism to budget for or document the cost of these subsidies. According state statutes, the Oklahoma Tax Commission must refund 85 percent of tax credits directly to the wind companies at their request, enabling wind farms to report misleading numbers. These subsidies distort the energy market by keeping rates artificially low, and deplete the state general fund, taking money out of the budget for other critical services.

OPRA is advocating for the establishment of sensible laws to regulate industrial wind energy companies and oversee future development in Oklahoma.

“These Wind Farms which are owned by companies in Spain, Portugal and other foreign countries, can do what they want, when they want and where they want at the expense of Oklahoma tax payers and property owners,” added Robson. “Rather than focusing solely upon raising taxes on the local oil and gas industry, which has been the backbone of Oklahoma’s economy, the legislature needs to look at doing away with the government subsidies that prop up this industry,” he added.

OPRA is also concerned about the long‐term impact this unregulated industry will have on property owners. The association supports legislation that prevents wind farms from being built near neighborhoods and homes, and believes the state should create oversight to ensure they are operated safely, well maintained and there is adequate funding to remove abandoned wind farms.

“Just like the Oklahoma Energy Resources Board (OERB) is committed to cleaning up orphaned well sites, industrial wind energy companies must provide adequate long‐term funding to repair or remove abandoned wind farms. These foreign corporations are heavily subsidized to operate in our state, but they are not required to share in the protection of our state.” Robson said.

Founded by local businessman and property owner Frank Robson, the Oklahoma Property Rights Association (OPRA) is a non‐profit organization dedicated to providing information about the local effects of industrial wind energy. It is comprised of more than 50 property owners across the state.

ADDENDUM

The Truth About The Cost of Industrial Wind Energy in Oklahoma
Receiving Nearly $193 Million in Subsidies

  • In March of 2014, the Oklahoma Wind Energy Coalition released a report entitled “The Statewide Economic Impact of Wind Energy Development in Oklahoma | 2003‐2012”, which stated that in 2012 there were 26 Wind Farms operating in Oklahoma with a rated capacity of 3,373 Megawatts (MW) of electricity.
  • There are currently under construction or in varying stages of development an additional 15 wind farms with a rated capacity of 2,760 MWs. (http://kansasenergy.org/wind_projects_OK.htm)
  • 39 of the 41 total wind farms are less than 10 years old and eligible for Zero Emissions Tax Credits. Operating at 5,760 MWs
  • 34 of the 41 total wind farms will be eligible for Ad Valorem Exemptions and Investment Tax Credits (those less than 5 years old). Operating at 5,230 MWs.

Zero Emissions Tax Credit

  • The Zero Emissions Tax Credit provides a tax credit for wind farm developers of $.005 per Kilowatt hour (KWh) of energy produced from these wind farms.
  • The total potential credit upon completion of planned wind farms under 68 OSA §2357.32(A):
    • 5,760 MW × 1000 KW per MW × 24 hours per day × 365 days per year × 35% capacity factor (wind does not blow at optimal levels for peak generation all of the time) = 17,660,160 KWh per year × .005 per KWh = $88,300,800 per year
    • The $88,300,800 in potential credit, if not used to offset taxes due, shall be refunded by the Oklahoma Tax Commission at the election of the company at the rate of 85 percent of the credit due.
  • According to reports by the American Wind Energy Association, wind power production in Oklahoma has significantly increased the past few years. Their report claims 10.8 million megawatt hours were generated, translating into 10,800,000,000 KWh at $.005 = $54,000,000 tax credits to be claimed for 2013 taxes.

Investment Tax Credit

  • Wind Farm Developers are also entitled under Oklahoma law to an Investment Tax Credit under 68 OSA §2537.40, payable at 1 percent of the cost of qualified depreciable property, annually for five years.
  • The Wind Energy report claims $6.1 billion was spent in the first 10 years of wind development in Oklahoma, but acknowledges that only $442,000,000 of that was actually spent in the state.
  • Based on the report of $6.1 billion invested, the credit could be as much as $61,000,000 per year.

Ad Valorem Tax Exemption

  • Wind Farm Developers are also entitled to a five‐year exemption on Ad Valorem Taxes under 68 OSA §2902, which under existing law must be reimbursed from the general fund to the taxing entities such as school districts, counties, rural fire departments, Career Tech etc.
  • Anticipated exemption to be claimed for 2014 is $43,440,146.
  • This exemption has created a $25,000,000 shortfall in the ad valorem reimbursement fund sources say. The shortfall must be paid by the state general fund.
Source:  April 21, 2014, Oklahoma Property Rights Association

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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