The Oklahoma legislature has proposed caps on tax credits for the wind industry that could have a devastating impact on the state's wind farms, renewable energy companies say.
Despite being the number two state for wind power capacity, Oklahoma has soured on its wind industry, which has lost all state-level tax incentives amid a budget crisis brought on by the oil bust. 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.
If passed, the bills could bankrupt existing wind farms, said Mark Yates, the head of the Oklahoma Wind Coalition, which lobbies for the industry.
"It is just absolutely devastating to go back and try to change any of this," Yates said in February. He added that finances for many wind projects depend on the tax credits.
House Bill 3069, which caps the tax credits at $10 million, passed out of the legislature's House Rules Committee earlier this month. Senate Bill 1035, which caps credits at $5 million, also passed out of the Senate Appropriations Committee.
The wind industry's tax incentives have come under fire as Oklahoma legislators have been scrambling to fill two massive budget holes, a $600 million hole in the current budget and a $878 million hole in the budget for the next fiscal year, which begins July 1.
Oklahoma's financial problems mostly stem from an oil bust that hammered a state budget that gets nearly a quarter of its revenue from the oil and gas industry. A coalition of business leaders created a tax revenue plan to narrow the budget gaps that would have imposed higher taxes on the state's oil and gas industry as well as the wind industry.
That plan proposed a production tax credit for wind farms in addition to a cap on zero emissions tax credits, but the plan failed in the Oklahoma House last month when it failed to gain the three-fourths majority needed to approve tax increases.