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Inside The Examination Of Wind Energy Tax Incentives

Apr 26, 2016

NextEra Renewable Energy Resources' wind farm near Elk City, Okla.
Credit Joe Wertz / StateImpact Oklahoma

A $1.3 billion budget hole and state funding crisis fueled by low crude prices has polarized a debate on the state’s financial support of wind-generated electricity.

Wind energy opponents aligned with oil billionaire and Continental Resources founder and CEO Harold Hamm want to kill wind incentives and impose a production tax similar to those levied on oil and gas production. Wind companies and supporters, for their part, say the incentives are vital and effective.

But there’s more to this debate than competing billboards along Interstate 35, The Oklahoman‘s Randy Ellis and Paul Monies report:

But behind the glowing wind industry studies and doom-and-gloom predictions by wind incentive opponents are real questions about how existing state incentives for wind energy are working and the long-term effects on local schools and the state budget.

Legislators are struggling to come up with ways to modify or end incentives that are using up a growing share of state tax revenue, Ellis and Monies report:

Some groups, such as the Oklahoma Public School Resource Center and economists from Oklahoma State University, have performed preliminary analyses of wind incentives, but concede that more study is needed. Meanwhile, the state’s Incentive Evaluation Commission is just getting started with its comprehensive review of economic development incentives. The commission is expected to release its first list of incentives to study at its next meeting in May.

It’s even hard to get agreement on just which state incentives for wind should be under review. The Wind Coalition, which counts wind developers and utilities among its members, said the wind industry voluntarily gave up half its state incentives in last year’s legislative session. Lawmakers ended a five-year property tax exemption for wind farms and reaffirmed a sunset date of Jan. 1, 2021, for a half-cent tax credit for electricity from zero-emissions sources.

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