Library filed under Taxes & Subsidies
Oklahoma wind developers are fresh off a record-setting year. Only Texas installed more wind capacity in 2016, a fact that thrusts the Sooner State's power markets into a sudden transition and is agitating opponents along the way.
As the O’Brien County Assessment of Wind Energy Conversion Property ordinance requires, MidAmerican Energy Company (MEC) recently reported to the assessor’s office the final net acquisition cost figure for the recently completed and commissioned O’Brien Wind Energy Project located in northern O’Brien County along Highway 18 near Sanborn.
As the US wind industry races to complete projects before the PTC expires, concerns are growing over looming tax reforms and the threat of border tariffs.
Wind power generators received $600 million in federal subsidies last year, helping to drive an increase in electricity prices for consumers. Data collated by Australian Power Project, which advocates a sustainable national energy policy, showed $588.7m was paid to wind farm operators.
Gov. Mary Fallin, R-Okla., recently released her proposed 2018 executive budget, which includes two new anti-wind tax proposals. The first proposal would end the zero-emission tax credit for wind facilities placed in service after 2017. The second proposal would begin taxing the production of wind energy at $0.005/kWh produced.
While the PTC has fueled big booms in US wind installations, it has also added a layer of complexity to the market by requiring many developers to secure tax equity. That additional complexity has been especially prohibitive for smaller developers and those based in other countries.
Signing this legislation was simply a mistake. What was promised to cost the state less than $2 million annually when I was in office has soared to $113 million for the 2014 tax year and is expected to cost billions in the future. Wind farms average 10 percent to 13 permanent jobs, which hardly lives up to the promised employment growth. ...As your former governor and a proud citizen of Oklahoma, I encourage us all to work together to end this subsidy no later than July 1, 2017.
State Rep. David Brumbaugh, author of House Bill 2246, said the cost is much more than officials first had in mind when they created the credit. He also said that wind generation has exceeded the goal set by former Gov. Brad Henry that renewable energy should make up 15 percent of the state's power generation by the year 2015. It's now at 20 percent, Brumbaugh said.
This essay is the second in a series aimed at exposing abuses by the Obama administration in its effort to force wind power on the public. Here we examine the rules governing the wind production tax credit (the PTC)—in particular, the IRS guidance for PTC eligibility— and changes the new Trump administration might consider.
Renewables producers will have to repay any financial support received in addition to the feed-in tariff to the national electricity system, according to a decree published by the industry ministry.
Congress’ renewal of the production tax credit in 2015 gave wind farm developers a powerful incentive to retrofit turbines, said Alex Morgan, a New York-based analyst for Bloomberg New Energy Finance. Thousands of turbines totaling 9,700 megawatts across the U.S. are between 10 and 20 years old, making them a prime target for upgrades, she said.
Plus, when the new subsidies are combined with existing federal cash, the amount in subsidies NextEra and Invenergy will be collecting will exceed the prevailing wholesale price of electricity in the state by nearly $13 per megawatt-hour.
Contention over wind development started in 2011 when the Michigan Tax Commission (STC) arbitrarily changed the taxing methodology and depreciation on wind turbines. The change lowered taxable values on turbines along with a faster depreciation rate.
With a four-year construction window for projects already qualified under the full PTC, does the smaller tax credit still matter? asks Karl-Erik Stromsta The US wind production tax credit (PTC) may have started its terminal decline on 1 January — dropping to 80% of its former value, on its way towards nothing in 2020 — but industry experts say it still has some kick in it.
The US wind industry would be wise to “lay low” as the Trump administration settles in, rather than mounting a noisy lobbying campaign, advises Gabriel Alonso, chief executive of EDP Renewables North America, one of the continent’s most important wind developers.
Oklahoma would become the second state to impose a tax on wind power, and its tax would be the nation's highest, under a proposal announced Monday by Gov. Mary Fallin. In her executive budget, Fallin proposed a 0.5 cent per kilowatt hour tax on electricity from wind generation. She also wants to sunset existing tax incentives for the wind industry earlier than planned.
The Clay County Commissioners’ Court will be ignoring the interests of Clay County if it awards more wind farm tax abatements.
Tuscola County commissioners are discounting over a year of contentious meetings, legal wrangling, and turnover of two township boards as a matter of personality differences, calling it a situation similar to the “Hatfields and McCoys” that’s hurting the county financially.
HONOLULU — President Donald Trump has disputed climate change, pledged a revival of coal and disparaged wind power, and his nominee to head the Energy Department was once highly skeptical of the agency’s value. What this means for states’ efforts to promote renewable energy is an open question.
In a statement to the stock exchange, ERM said the price for the large-scale generation certificates had more than doubled to nearly $90 each, while the penalty to the regulator was valued at $65 per certificate.