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With SB 888 failing to advance Monday, lawmakers committed to ending the wind tax credit refundability could turn their attention to HB 3716, a bill that surfaced Friday. HB 3716 eliminates the refundability but allows companies to retain the credits for 20 years to decrease their Oklahoma tax liabilities.
Senate Bill 888 would not abolish zero emission tax credits, but would make them no longer refundable. That means wind companies could still use the income tax credits to offset taxes they might owe. However, once that tax liability goes down to zero, they would no longer be able to turn the remaining tax credits back to the Tax Commission and receive 85 cents on the dollar from the state treasury.
SB 888 eliminates the refundability of tax credits for renewable energy generation. The state stopped issuing new credits several years ago, and the state is already scheduled to phase out the program altogether by 2027. Zeroing out the refundability feature could save the state as much as $750 million from 2020, when SB 888 takes effect, until 2027, Coody said.
What is known so far is that the deal would place a $1 per megawatt hour tax on the production of wind energy, but only for new projects. The proposal also will include what's been dubbed "section nine," a guarantee that the gross production tax will expire if a future Legislature tries to eliminate or cap the industry's incentives.
"If we don't do something truly meaningful this session, not next session, another $70 million is literally going to be gone with the wind," Brecheen said. The senator said the bill would end corporate welfare payments, not by eliminating the tax credit, but by eliminating the refundability aspect of it.
Giving teachers in Oklahoma a raise is past due. WindWaste was established on the premise that more funding for education was critical, and the industry that has profited most in recent years from Oklahoma subsidies should contribute.
MAYVILLE — The Chautauqua County Legislature approved a resolution requesting the Chautauqua County Industrial Development Agency not to approve further PILOT agreements for wind energy projects larger than five megawatts rated-capacity Wednesday night.
If the state has been reimbursing county school districts for wind’s ad valorem taxes, then this has not expanded the total funds to school districts at all; it has just forced the state to transfer dollars from the General Revenue Fund that otherwise would have been earmarked for school districts across the state to those rural districts near wind facilities. Robbing Peter to pay Paul does nothing to help education.
Legislative panels on Thursday passed House Bill 3710, which would put a $35 million cap on the zero emission tax credit. Last year, lawmakers decided to sunset the tax credit in 10 years for new production. The clock began ticking July 1.
Two bills, one in the House and another in the Senate, have proposed capping the state's zero emission tax credit. In 2016, Oklahoma paid $74 million in zero emission tax credits, which the legislature is proposing to cap at $5 million or $10 million.
Yates said the legislators don’t understand that the tax credits were built into the business models when the wind industry companies won state approval to build wind farms in Oklahoma. “These projects are not profitable for the first 12 years of existence,” he explained. The Wind Coalition leader said for the state to go back and change the rules “of the game so dramatically after these projects are already up and spinning, the investment is there and now to go back in and change is devastating.”
McBride is proposing a $1 per megawatt hour tax on wind power, as well as eliminating the industry’s manufacturing sales tax exemption. Other lawmakers want to cap incentives already awarded to existing projects. After 20 years, McBride said it’s time to stop subsidizing the wind industry.
The [wind] industry faces the loss of federal development initiatives after 2020, a timetable that spurred the industry to initiate these mega-projects in the first place and place big bets on these enormous farms instead of smaller, quicker projects. ...This transitory surge poses a dilemma to equipment providers and specialized logistics handlers alike: How do they gear up for an expected building spree knowing that it will most likely be short-lived?
With less tax-equity investments, smaller companies like PosiGen may lose out to more established developers. For PosiGen, it means turning to a different class of investors. “We can’t get past banks’ credit committees anymore,” Neyhart said. “We’re talking to more family offices.”
“The department concedes that customers taking net metering services directly receive the benefits of the net metering system,” the DPU said in its ruling. “The costs of net metering, however, are borne by all electric customers, whether or not they receive net metering credits. Consequently, there is a transfer of costs rooted in the net metering system.”
But the impressive growth of renewable power requires an asterisk — that subsidies are largely responsible for it. A billion-dollar net worth is less impressive if the first $900 million is inherited. And even with such lavish subsidies, wind and solar power still account for only 7 percent of total U.S. electricity generation.
Wind energy advocates are speaking out as lawmakers confirm one piece of their proposed budget plan includes placing a gross production tax on wind energy. The tax could be 4 percent for 36 months and 7 percent after that.
Lawyers and accountants in the renewable energy industry are poring over the details of the tax overhaul President Trump signed into law last week, trying to figure out what companies will lose or gain.
The wholesale costs of power make up only about a fifth of the average household electricity bill in Germany. The rest is a stew of taxes, fees to finance renewable-energy investments and charges for use of the grid. That means their bills are lower than they otherwise would be, because power prices are sometimes negative, but utilities are not depositing money in customers’ bank accounts.