The Oklahoma Tax Commission has said it expects to pay nearly $12 million to producers of renewable energy — mostly wind farms — in zero-emission tax credits this year. The commission projects those payments to swell to $19.1 million by 2018.
Businesses are eligible for credits based on the amount of energy created by their facilities during the first 10 years of production.
Companies can apply credits to lower their tax payments to the state, then cash in unused credits. For example, a company with a $100 tax credit that only owes $50 in taxes can sell the remainder of the credit, or $50, back to the state for 85 cents on the dollar.
The reimbursements come from the state’s income tax fund.
When the industry first started developing, few companies claimed the incentives. State records show that number is climbing each year, as more wind farms are operational, Mosier said.
“Can the state of Oklahoma afford to pay? he asked. “I submit to you they cannot. It’s a blank check, and we can’t afford it.”
He urged lawmakers to consider capping the amount that wind producers can claim, as well as regulations to protect homeowners from the expanding industry.
Rep. David Brumbaugh, R-Broken Arrow, said the Legislature is trying to balance what it can pay now and what it can afford in the future.
While promoting the industry’s benefits of, Jeff Clark, executive director of the Wind Coalition, acknowledged the importance of reviewing the tax credits.
“The incentives as they are currently structured create some anxiety,” he said, acknowledging that a lack of predictability creates budgeting issues. “We want to take some of that anxiety to craft a benefits package that is predictable and takes away some of that anxiety.”