OKLAHOMA CITY – The Oklahoma Senate on Monday killed a bill that would have ended a lucrative incentive given to wind farms.
Senate Bill 888, by Sen. Josh Brecheen, R-Coalgate, failed by a vote of 18-23 after securing House approval last week.
The bill, presented by Sen. Marty Quinn, R-Claremore, would have ended the refundability of zero-emission tax credits.
Under current law, electricity-generating companies earn the credits at a rate of a fraction of a cent per kilowatt-hour of electricity generated with no emissions, such as through wind, water, sun and geothermal sources, and can redeem them to reduce their state tax liability for 10 years. Companies can cash in credits to the tune of 85 percent of the face value of the tax credits.
The credit was phased out July 1, 2017, meaning no new projects can receive the credit.
Critics of SB 888 said the state was going back on its word by taking away an incentive that was used to lure wind companies to the state for development.
Supporters said the deal the state made was too generous and that it could no longer afford it.
“We are subsidizing the industry with a subsidy we can’t afford,” Quinn said.
But Sen. Casey Murdock, R-Felt, said the Oklahoma Department of Commerce used the incentive to recruit wind companies in other states and around the world to Oklahoma, and he questioned why the Legislature would kick sand at some of the largest investors not only in the United States but in the world.
Murdock also said he was concerned that the state could be sued should it revoke the incentive.
“This is one of the worst bills I had to vote on this session, not just because it affects wind companies in my district,” said Sen. Roland Pederson, R-Burlington. “It sends the wrong message regarding any future investment of any kind by not honoring our word.”
The tax credit has been available to electricity producers since 2003. Quinn said the incentive was given to what was then considered a fledgling industry.
“This industry long, long, long ago surpassed the fledgling industry mark,” Quinn said. “We went from incentivizing an industry to us subsidizing an industry, and it continues to this day.”
If the state did not have to pay the refund this year, it could save $74 million to $75 million, Quinn said.
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