Corporation Commission adopts rule change that will require wind facility operators and developers to pay annual fees
Oklahoma’s Corporation Commission on Thursday adopted updated rules that include a new provision to require wind developers to pay the agency annual fees.
The provision requires owners of wind energy facilities to pay the agency $2,000 annually per facility to help compensate it for its oversight responsibilities. It also requires developers of proposed wind energy facilities to pay the agency $5,000 whenever they submit notices to the agency of their plans to build a new project.
Negotiations on the fee structure between the agency’s Public Utility Division and wind industry representatives on the rule continued up until just before commissioners gathered to consider the proposal, officials said.
They estimated Thursday annual fees collected on Oklahoma’s current 58 operating wind farms will generate $116,000 annually.
As adopted, the rule requires the fee to be paid on each project by March 1, concurrently with when project owners provide the commission with operational data related to each project’s nameplated capacity and production.
The fee is authorized by existing state law and was sought by commission officials because of ever-more-burdensome regulatory requirements Oklahoma’s Legislature has added over time to oversee the projects’ build outs and operations.
The fee won’t be required from owners of individual turbines that generate power they consume at their homes or businesses. It also won’t have to be paid by regulated utilities that own wind projects in Oklahoma, given they already pay fees to the division as part of their annual utility assessments.
Brandy Wreath, director of the commission’s Public Utility Division, addressed commissioners about the fee before it was adopted. At an earlier hearing on the rule, Wreath said it costs the division about $300,000 annually to regulate the industry.
But Wreath said the agreed-to structure should work, given that the division’s most labor-intensive oversight facilities are needed at the front end of proposed developments, when regulators must be sure the projects meet prescribed setback requirements.
“It will be efficient for us to track and monitor,” Wreath told commissioners.
The wind business in Oklahoma is getting to be substantial.
The Advanced Power Alliance reports wind developers in Oklahoma have invested $20 billion and paid out $51 million annually in land leases to property owners across the state the past decade.
Information the alliance was distributing at the Capitol this week also said wind generates 36 percent of the electricity created in Oklahoma to supply energy to the Southwest Power Pool and that 97 percent of that wind-generated power is consumed by Oklahomans.
Mark Yates, a vice president with the alliance, told commissioners Thursday wind developers in Oklahoma support the approved provision.
“Ultimately, this is in some ways an unfunded mandate that fell in your lap,” Yates said. “I think this is a good compromise, and ultimately, the industry is supportive of the language you are seeing today.”
Commissioner Bob Anthony joined Commissioners Dana Murphy and Todd Hiett in adopting the rule.
But before voting, Anthony said he wasn’t happy about it, noting he worried that it might have a dampening impact on future development and could create additional work for the agency it doesn’t need when it someday must go after facility owners that don’t pay their fees.
Anthony indicated he felt it was incumbent on the legislature to adequately fund the agency so it could fulfill its responsibilities.
“This agency used to be a regulatory agency,” Anthony said. “It has been turned into – thank you, Legislature, and some other people – a collection and payment operation. I didn’t sign up for that ritual.”
Hiett said he understood Anthony’s concerns, but added that he would rather the costs be borne by the wind industry than by either utility rate payers or taxpayers in Oklahoma.
“I don’t like taxes or fees more than anyone else, but someone has to pay this bill,” he said.
Murphy, the commission’s chairman, thanked her colleagues for their comments and thanked the agency’s staff and wind industry officials for their efforts to reach a compromise.
“Different parties worked together to come up with an answer in this case, and it shows we are willing to take into consideration differing viewpoints” to get there, Murphy said.
The adopted rule changes go to the governor and legislature next for their review and approval.
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