Oklahoma Governor’s Budget Proposal for Wind Industry Misses Mark

Jeff Clark, President of The Wind Coalition, released the following statement in response to Oklahoma Governor Mary Fallin’s budget proposals.

“The future of energy in America will be one led by natural gas, renewable energy, and innovative technologies surrounding storage and efficiency.  Oklahoma can lead in that prosperous energy future if it chooses to do so and Governor Fallin has long advocated an ‘all of the above energy plan’ to position the state to benefit from an American energy renaissance.  She recognized the promise that a diverse energy portfolio can deliver as well as Oklahoma’s urgent need to diversify its economy.

“Contrary to those goals, proposals in Governor Fallin’s budget would close the door on that ‘all of the above’ plan and send a message to the nation’s investment community Oklahoma may no longer be open for diverse energy investment.

“Over the last decade, the wind energy industry has invested more than $9 billion in Oklahoma.  The benefits for taxpayers, school districts, ratepayers, and landowners have been meaningful and measurable.

“Wind projects have created more than 1,600 jobs in Oklahoma, creating more than $22 million in annual farm and ranch landowner payments, while enabling Oklahoma to have some of the lowest electricity prices in America.  Most importantly; rural public schools, students, and teachers have benefited from state of the art classrooms, new equipment and computers, new athletic and academic facilities funded with new tax revenue from wind projects.  Projects invested in Oklahoma will continue to deliver more than $1 billion in new funding for public education over their project lives.

“Proposals like those presented in the governor’s budget close the door on wind energy investments in Oklahoma, drive the industry to neighboring states, cut off new wind-delivered funding for public education, and add a tax on consumers’ electric bills.  Few proposals have been more shortsighted or more counter to their stated purpose.

“Local schools in rural wind regions of the state are the direct beneficiaries of wind investment.  More than $1 billion in new funding for education is slated to continue to flow to those school districts and they need the support.  Unlike other energy producers, taxes on wind projects are paid primarily at the local level, not at the state level and those tax revenues go directly into the classroom, not to the state’s general revenue.  This budget proposal would take money from rural school districts and hand it over to the state legislature for appropriation.

“This proposal would raise electricity bills for working people who can least afford to pay higher energy bills – and would give a free pass to the electricity produced using imported energy from other states.  Why would budget writers raise taxes on Oklahoma’s cleaner electricity generators to make them less competitive against electricity generated from imported dirtier fuel sources from other states?  That makes no sense.

“During the economic downturn, wind energy was one of the few industries that rode through the storm continuing to invest in the state, creating jobs in the state, and remaining committed to the state.  Wind investments and wind jobs helped diversify the economy and kept revenue flowing to schools, even in hard economic times.  If lawmakers are committed to fully funding public education and teacher pay raises, they’ll remain committed to bringing more wind investment into Oklahoma, not driving it away to competing regions.

“Creating a less competitive energy environment via taxation only hurts consumers while reducing the competitiveness of one of Oklahoma’s most viable industries.  Raising electricity rates and ending the state’s commitment to renewables also drives away needed investment in Oklahoma by manufacturing and high-technology facilities – who also provide jobs and pay taxes.  Finally, changing the investment rules in the middle of the game sends a message to every investor in America that Oklahoma can’t be expected to honor its economic development commitments.

“This budget proposal also fails to recognize that the wind industry remains the first – and only – industry to proactively come to the legislature offering to work collaboratively to phase out all of the tax incentives from which it benefits.  In 2014, The Wind Coalition offered to work to phase out the Investment Tax Credit and the Ad Valorem Tax Exemption, and both have been eliminated.  Today, only the Zero Emission Tax Credit (ZETC) remains and it is scheduled to expire at the end of 2020.  Even then, The Wind Coalition has been working with lawmakers to find ways to adjust that credit, while keeping Oklahoma competitive for investment.

“Bottom line:  Instead of taking money from local schools to balance the state budget, Oklahoma should be seeking ways to diversify the economy and attract more investment to the state.  A budget proposal to raise taxes on electricity and harm wind energy projects under development hurts public schools, hurts local communities, hurts job creation, and deters investment.  It’s a misguided idea that should be forcefully rejected.”