The wind industry receives at least $193 million in state tax incentives each year in Oklahoma, a group wanting additional regulations on future wind developments said Monday.
The Oklahoma Property Rights Association, led by Claremore businessman Frank Robson, said state lawmakers are “writing a blank check” to the wind industry with the incentives. Robson said the wind industry is taking revenue from the state budget that could be spent on schools and other services.
“While renewable energy plays an important role, the true success of an industry is measured by its ability to produce a profit without government subsidies,” Robson said. “At a minimum, its success shouldn’t come at the expense of our children’s education.”
The association said it used a wind industry report released in March to calculate its estimates for the incentives. The Wind Coalition said the industry invested more than $6.1 billion in Oklahoma in development and construction in the last decade.
Representatives from the wind industry said Oklahoma competes against its neighbors Texas and Kansas for developments. Those states also offer incentives to wind developers and utilities.
Curt Roggow, Oklahoma director for The Wind Coalition, said the coalition’s study was done by a third-party consulting group, Economic Impact Group LLC. He said Oklahoma’s tax incentives have helped spur development in the state.
“The incentives were a success for bringing in $6 billion of investment into the state of Oklahoma,” Roggow said. “The life of a wind farm goes several years beyond the limited incentives the state offers.” Roggow said.
Wind developers can qualify for several state tax incentives, some of which are available to other industries, too. The Oklahoma Property Rights Association examined three programs: zero-emissions tax credits; investment tax credits; and the ad valorem property tax exemption.
The association said wind developers could qualify for up to $88 million annually from the zero-emissions tax credit, which allows a credit of 0.5 cents per kilowatt hour of electricity generated for up to 10 years. The tax credit used to be transferable, but lawmakers made it refundable starting in 2014, greatly enhancing its benefit to the industry.
“If wind farms don’t make enough income to claim their subsidies, the Oklahoma Tax Commission provides them cash payment of 85 percent of their tax credit,” Robson said.
Wind developers also qualify for a five-year exemption on local property taxes that is reimbursed by the state to schools, counties and CareerTechs. The ad valorem property tax exemption also is available for large manufacturers and data centers. Money for the reimbursements comes from the first 1 percent of state income tax collections.
The association said existing wind farms and those planned for construction would amount to $43 million in ad valorem tax exemptions in 2014.
The latest figures from the Oklahoma Tax Commission show wind developers claimed about half – $32 million – of the $64 million in ad valorem tax exemptions in 2013.
Roggow said those reimbursements to local taxing authorities would not have been made without the investments by the wind industry. He said local landowners who lease to wind farms get another $22 million in annual royalty payments.
Another incentive, the investment tax credit, could be worth up to $61 million for the wind industry, the association said.
Roggow said the investment tax credit is used by utilities, independent power producers and other industries, not wind developers.
The association and the wind industry were on opposite sides this year over Senate Bill 1440, which would have put a moratorium until 2017 on wind farm developments in the eastern half of the state. The bill, by Senate President Pro Tempore Brian Bingman, R-Sapulpa, passed out of the Senate but failed to get a hearing from a House committee.
SB 1440’s House sponsor, Rep. Earl Sears, R-Bartlesville, said last week he’s still interested in studying the issue. Sears said he is open to finding a related bill in which to place similar language regarding additional wind farm regulations.
Wind energy tax breaks challenged by new association
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