For more than four years landowners in Sequoyah County and neighboring Arkansas counties have questioned the need for overhead transmission lines that by necessity would mean landowners along the given route, would have to either sell their land outright or grant an easement to Clean Line, LLC. For most of that time, landowners have fought against the energy transmission lines crossing their properties.
With a swift stroke of the pen on Tuesday, Gov. Mary Fallin ended the tax credit incentives for more wind energy producers. Without the additional wind energy producers, Clean Line will not be able to provide the necessary 4,000 additional wattage to meet its proposed sales to the Tennessee Valley Authority.
“The signing of this bill should certainly have the attention of Clean Line and their investors,” Daron Harrison, a Sequoyah County landowner who opposes the construction, said. “I think they will persevere at least until investors pull out.”
Mario Hurtado, executive vice president for development for Clean Line Energy Partners, said the signing of the bill will have little impact on the progression of the plans for the direct current overhead transmission lines running from western Oklahoma to Tennessee.
“We are part of wind-energy coalition and were expecting and supportive of this legislation,” Hurtado said. “We’ve been part of this discussion for quite awhile. This is the last of three bills affecting wind-energy credits.”
“These tax credit bills are part of the adjustments we were prepared to make,” he said.
“Clean Line Energy, which has a “Transmission Only” utility status, will now find itself competing for current Oklahoma wind generated energy, currently at 7,000 megawatts. Clean Line’s proposal of providing an additional 4,000 megawatts of wind generated electricity to the TVA is now in question,” Steve MacDonald, another opposing land owner, who has led the fight against the Clean Line, said. “Gov. Fallin has signed HB2298 that will roll back the energy tax credit that’s been in place since 2003 with overwhelming majorities in both the House and Senate. These tax credits are estimated to cost Oklahoma $120 million per year in lost revenue, draining Oklahoma’s state Treasury.”
“We were never planning on constructing new wind turbines,” Hurtado said. “Our suppliers in western Oklahoma are prepared to meet our needs. We are still planning on being in service by the end of 2020 – 2021 by the very latest.”
MacDonald explained that to meet the promise of an additional 4,000 megawatts of power, at least 50 percent more wind towers would need to be built, but without the tax credit there is no incentives to construct more towers.
“What does this mean for Clean Line Energy Partners? No new generators will be built after July 1 of this year because the incentive has now been removed. Where will the additional generated wind energy come from?” MacDonald quoted millionaire Warren Buffet, “For example, on wind energy, we a get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
“Wind energy is still an important part of the overall energy equation. We are very excited to move forward with the project. We are encouraged to see the Trump administration moving forward with plans to meet the demand for renewable energy sources,” Hurtado said.
State Rep. John Bennett, R-Sallisaw, who has attended numerous meetings sponsored by Clean Line and landowners also feels that ending the tax credits is a good thing.
“We were losing millions of dollars in this tax credit to an industry that was not providing a high number of jobs or a return to our citizens. I’m glad for the savings this bill will mean for our state,” Bennett said. “By ending the credit in July, it is estimated Oklahoma will save up to $500 million over the next 10 years.”
“I promised I would work on doing away with tax credits that are not providing a return on our investment to our state” Bennett said.
Bennett said the money saved can be used for core government services such as education, transportation and public safety.
Hurtado stands behind the claims that the construction of the transmission lines will bring in more than $1.2 million in ad valorem revenue to Sequoyah County.
“We are very confident in the strength of the process which will create jobs and manufacturing,” Hurtado said. “We have purchased more than half the necessary easements and again we are encouraged by the support we have seen.”
“This is just another way the Legislature is working to provide common-sense government and a way to fund core services without raising taxes,” he said.
“I see this as a good thing for Oklahomans,” Harrison said. “I am feeling more confident about keeping them off my property.”
“Clean Line Energy is facing a federal lawsuit filed by two LLC’s in Arkansas that are scheduled in the fall of this year. The suit questions federal authority over individual states rights regarding the citing authority retained by the states Utilities Commission. Which ever way those rulings go, both sides will no doubt appeal the ruling to a higher court and that alone will add months to Clean Line’s timeline for completing their Plains and Eastern Project,” MacDonald said.
“In any project of this scale there are bound to be some battles, but we are still excited to see the process go forward,” Hurtado said.