Wind-generation tax credits could end soon news muskogeephoenix.com electricity generation in india

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Those who support the tax credit point to increased property tax base and ad valorem revenue spurred by the installation of equipment that had an appraised value in 2014 of $3.4 billion. A 2015 report published by the State Chamber of Oklahoma Research Foundation found ad valorem tax revenue generated by wind farms during that 10-year period totaled nearly $134 million, and one study estimated royalty payments to Oklahoma landowners where wind farms are located were receiving more than $122 million annually while simultaneously allowing them to continue their farming and ranching activities.

A 2016 report published by the chamber shows wind power provides nearly 17 percent of the state’s electricity, and saved Oklahoma consumers $1.2 billion in savings on their electricity bills. The industry, according to that report, is supported by 4,001 to 5,000 direct and indirect jobs while providing several environmental benefits.

Curtis Chambers, an Oklahoma Renewable Energy Council board member, said the state — already ranked fourth in the nation for installed wind capacity — said he believes the industry could overcome an abrupt end to the tax credit in the long run. But in the short term, he said, it could impede the growth of an industry that is relatively new to the state.

"I think in the long run, Oklahoma will be one of the finest places to build a wind for-profit in the United States," said Chambers, who is part of an organization that promotes the development of renewable energy that is complementary to natural gas and can help stabilize long-term energy prices. "But this may slow it down a little bit — there will be some people who won’t be as happy because they have already made their investments."

Mario Hurtado, executive vice president of Houston-based Clean Line Energy Partners, agreed an abrupt change in tax policy could have an adverse impact on wind farm developers. Inserting such uncertainties into the business equation, he said, generally is not good business policy.

"We think that is not good policy toward business," said Hurtado, who is overseeing the construction of a high-voltage transmission line that will carry wind-generated electricity from western Oklahoma to markets in the Southeast. "There are projects out there — not related to Clean Line — that have already invested their money and were playing under the rules that had been set, and now they want to change the rules literally in the middle of their construction process."

Hurtado said HB 2298 should have little impact on a $2 billion high-voltage transmission line that will carry wind energy across Oklahoma and Arkansas to Mid-South and Southeast markets. The Plains and Eastern Clean Line transmission line, a 700-mile project that has been in the works since 2010, will have the capacity to deliver 3,500 megawatts of wind-generated electricity from the Oklahoma and Texas panhandles.

Terminating the tax credits this year, if the bill becomes law, could have an impact on where those wind farms are sited. Hurtado said the companies that will build the more than 2,000 wind turbines needed to feed current through Clean Line’s transmission line base siting decisions on a number of factors, and tax policy is one of those factors.

"It may change the amount of wind energy that connects to us … (from) Texas versus Oklahoma — the Oklahoma Panhandle is not that wide (and) the wind doesn’t pay attention to state lines," Hurtado said. "Unfortunately, that would mean less investment in Oklahoma and the school districts there — that could be a change, and that is certainly something we have made people aware of."

Clean Line‘s transmission line, Hurtado said, will contribute an estimated $13.2 million in annual ad valorem tax revenue to the 14 Oklahoma counties it will cross — Muskogee County will get about $1.4 million annually. Muskogee County also will share in the nearly $3.2 million Clean Line will pay in one-time, up-front payments for infrastructure.

"The wind industry is willing to take that hit and step up," Hurtado said about its willingness to help solve the state’s budget problems. "We think other parts of the state can probably do that …, this is a solvable issue Oklahoma has — it just takes people coming together and taking steps forward."