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OKLAHOMA CITY – Tempers flared Tuesday as members of a wind advocacy group accused some lawmakers of pressing for “punitive” taxation that would harm the industry.
“I think there have been some that have grabbed onto the anti-wind rhetoric and believe that’s the scapegoat for the state’s problems and the state’s ills,” said Mark Yates, executive director of OK WindPower, which promotes wind development.
Yates said the industry has “truly transformed our energy economy,” and Oklahoma is now the No. 2 wind producer in the country. Only Texas produces more, he said.
However, Yates said the attitude of some lawmakers and proposals to add new wind taxes are making producers think twice about investing in the state and jeopardizing the financing for projects.
Even as group’s members were holding their press conference, state Rep. Mark McBride, R-Moore, ripped down OK WindPower signs the group had taped to doors. A House staff member then told the group it had to stop the gathering in the House lounge.
“When I saw them taking advantage of the House lounge when we have a broadcast pressroom, it made my blood boil,” McBride said after the meeting. “Who do they think they are that (they) can just go anywhere in the Capitol that they want?”
McBride is proposing a $1 per megawatt hour tax on wind power as well as eliminating the industry’s manufacturing sales tax exemption. Other lawmakers want to cap incentives already awarded to existing projects.
After 20 years, McBride said it’s time to stop subsidizing the wind industry.
“Somehow, they’ve got to pay tax,” he said. “They’re taking big advantage of these $2 million turbines going up. They can sing whatever song they want to sing. They don’t pay. The state is paying.”
But the industry has been a boon for rural communities and school districts, supporters said.
In Garfield County, the industry makes up three of the top seven taxpayers, said Wade Patterson, the recently retired county assessor, who now operates a consulting business.
He said more than 20 Oklahoma counties have wind projects, and the industry is the top taxpayer for more than 50 school districts.
“We’ve taken something that is in the middle of wheat fields, which are not valued extremely high, and we have put the largest valuation we’ve ever seen in the middle of these very rural areas,” Patterson said. “It’s been a godsend.”
But critics of the industry argue that up to 60 percent of the energy generated by the turbines is being sent outside the state, leaving Oklahoma’s taxpayers to foot the bill for other states’ economic development.
All told, the state once offered four kinds of tax incentives to the industry, including a five-year exemption on property taxes, which ended in December 2016.
Last year, the Legislature voted to end a controversial wind subsidy, known as zero-emission tax credits. Wind farms already operational by the start of July 2017 were still eligible to receive the incentive, which is offered to producers for the first decade of a wind farm’s operation. Companies use it to lower tax payments then cash in unused credits.
In 2014, Oklahoma paid more than $59.7 million to producers – nearly triple what it paid two years prior. Wind producers, meanwhile, reported generating enough energy to have claimed as much as $113 million in the credit, according the state Tax Commission.
“We’ve seen the dire straits that our state is in,” Yates said. “We see the structural problems with our budget and how the state has run a budget deficit year after year after year. The wind industry has worked with the Oklahoma Legislature to phase out every incentive that was offered by the state to bring this industry to Oklahoma.”
Yates contends all electricity generated should be taxed equally, and his industry shouldn’t be asked to pay a bigger share.
“We are against any punitive action toward this industry,” he said.
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