March 13, 2015
Oklahoma

Wind energy bills continue to progress

By Nathan Thompson | Bartlesville Examiner-Enterprise | March 12, 2015 | examiner-enterprise.com

Several bills dealing with the state’s growing wind energy are progressing through the Oklahoma House of Representatives and Senate.

House Bill 1549 by Rep. Earl Sears, R-Bartlesville, passed the House Wednesday by an 87-9 vote. The measure would place new restrictions on new wind energy producers across Oklahoma.

Sears’ bill would restrict how close giant wind turbines can be built near airports, hospitals and schools, and would require wind energy producers to notify nearby property owners before construction. The measure also requires a public hearing to be held prior to a new wind turbine being installed.

The original version of the bill initially imposed broader setback restrictions, limiting how close the turbines could be erected to homes, city limits and oil production facilities. Sears removed that language while the bill was still in committee, prior to being sent to the full House for consideration.

Eight Democrats and one Republican voted against the measure in the House of Representatives. Rep. Travis Dunlap, R-Bartlesville, and Rep. Sean Roberts, R-Hominy voted in favor of the bill.

The full Senate on Tuesday gave approval to Senate Bill 498 and Senate Bill 501. Sen. Mike Mazzei, R-Tulsa, is principal author of the measures, which would take effect Jan. 1, 2016.

“These credits were originally approved to encourage job growth through incentives for what was then a fledgling industry in this state,” Mazzai said. “That is no longer the case, so in a time of limited state resources, revisiting those incentives to ensure the benefits do not outweigh the cost is a responsible approach on behalf of Oklahoma taxpayers. We know that without reform, the cost of these tax breaks will continue to grow at a troubling rate.”

Senate Bill 498 would adjust the state’s ad valorem policy to change the exemption for wind manufacturing that requires specific job creation in order to qualify for the tax credit. The previous threshold was that the wind energy producer would have to create $250,000 in company payroll prior to the tax credit going into effect. Mazzai’s bill increases that to $1 million in annual payroll.

Senate Bill 501 would reduce zero emissions tax credits over a five year period and establish a $6 million statewide cap. The sunset would reduce the credits to one-half of a cent per kilowatt hour in 2016, and then the credit would reduce by one-tenth of a cent each year after that. In addition to the $6 million cap, the language of the bill states that the credit would be available on a “first-come, first-serve basis.

“If we fail to adjust these incentives, the consequences to state services could be devastating. Looking at the combined impact of tax breaks for current and planned industrial wind facilities, the cost is projected to be at least $700 million over a ten year period,” Mazzei said. “I have long supported the use of incentives to boost job growth, but I believe there is an increasing awareness that we must exert greater oversight over these incentives to make sure they are doing what they were designed to do without costing more than they generate for our state.”

Both measures now advance to the House of Representatives for further consideration. Sears is the principal author in that chamber.