A state tax credit that has helped propel Oklahoma to third in the nation in its capacity to generate electricity from wind is expected to end soon.
Gov. Mary Fallin has signed legislation that will roll back a 10-year tax credit for electricity generated by zero-emission facilities. It’s an incentive for wind power generators as well as geothermal, solar and hydropower producers that’s been in place since 2003.
House Bill 2298 modifies the tax credit for electricity generated by zero-emission facilities like wind turbines. It says facilities must be in operation by July 1 in order to qualify for the credit, instead of the current deadline of Jan. 1, 2021.
The bill passed through the House with a vote of 69 to 25. It was also approved by the Senate with a vote of 40-3.
It’s one of several revenue proposals under consideration as lawmakers struggle to close an estimated $868 million budget shortfall.
“This bill is about prioritizing expenses during a contraction cycle in state revenues. The zero-emission tax credit worked exactly as it was intended. When the Legislature introduced the credit, the goal was to incentivize investment in Oklahoma. The hope then was that wind could someday provide 15 percent of our energy portfolio. Today, wind generates 25 percent of the state’s electricity production. The behavior you incentivize is the behavior you receive, and we have incentivized the wind industry during the last two decades. We are thankful for the wind companies and producers that came to the table to help us craft this plan. The savings from this bill will help us return our state to solid financial footing so that we can invest more in education, public safety and other priorities,” said House Speaker Charles McCall.
But fiscal analysts say closing the credit will have no short-term impact on state tax collections.
Gov. Fallin signed the measure on Monday, April 17th.
“The wind industry for Oklahoma is an essential piece of my ‘All of the Above’ energy strategy. With the support of the zero emissions tax credit, our state has become a national leader in wind energy. Currently, Oklahoma ranks third in the nation in total installed wind capacity, with nearly 7,000MW in the ground. This accounts for more than 25 percent of the state’s electricity generation mix, and is an important contributor to Oklahoma having the lowest cost of electricity in the nation.
“The zero emissions tax credit was key to the growth of wind energy in Oklahoma, and I’m grateful to the industry for their ambitious successes, as well as their willingness to work with the state to address our challenging budgetary circumstances. Their leadership, along with the leadership of Speaker McCall and Senate Pro Tem Schulz, is a critical part of our continued investment in the future of our state. It is time to ensure that Oklahoma has a bright future, and continues its position as a prominent energy state,” she said in a statement.
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