Oklahoma’s zero-emissions tax credit for renewable energy – mostly wind energy – could be culminated for new projects this summer under a bill (HB-2298) passed 74-24 on March 9 by the state’s House of Representatives, according to a March 10 report by The Oklahoman.
The measure, sponsored, by House Speaker Charles McCall (R-Atoka) would terminate the tax credit on July 1, more than three years earlier than its current sunset date.
The bill passed over objections from some lawmakers who believed it could jeopardize wind projects already in an advanced stage of development. Supporters said the incentive had become “unsustainable,” according to the local news outlet, with the state paying out more than $54 million in refunds in 2015. The measure now heads to the Senate.
As it stood, the tax credit was worth 0.5 cents per kWh of electricity generated by renewable resources. It is refundable at 85 percent of its value and can be carried forward up to 10 years.
With lawmakers facing an estimated $878 million budget shortfall, HB 2298 supporters said it would help put the state on firmer financial footing for the future.
“We can’t afford it,” said State Representative. Jon Echols ( R-Oklahoma City), who presented the bill on behalf of McCall.
House Democratic Leader Scott Inman ( D-Del City), told the local news outlet that, by ending the incentive early, the Sooner State is sending the wrong message to the business community – not just to the wind industry. He said several projects in western Oklahoma could be affected by the early sunset date.
However, the newspaper reported, other Democrats wondered why they haven’t seen bills from the Republican leadership that changed the rates on gross production taxes for oil and gas.
“Are we going to take the same line with other giveaways, with other credits, the very low gross production tax, with all of these?” asked State Representative Emily Virgin (D-Norman). “Because if we don’t, it seems like we’re unfairly targeting wind.”
Echols said lawmakers last year scaled back an incentive for economically at-risk oil wells, which saved an estimated $112 million. “We made a significant cut on oil and gas last year while making no cut on wind last year,” Echols said.
Echols told The Oklahoman that he hoped ending the wind tax credit early could help pay for other legislative priorities like a teacher pay raise.
“Stop just writing next year’s budget. Start writing the next four years’ budget,” Echols said. “This will not kill the wind industry in the state of Oklahoma. The state of Oklahoma will come out stronger as a result of getting on the right track with the wind industry. We can show we are committed, not to oil and gas, not to the wind industry, we are committed to our citizens.”