Oklahoma to end tax credits for wind energy

State among the top wind energy producers, so governor sees further support unnecessary.

By Daniel J. Graeber
Oklahoma Governor Mary Fallin signs measure that ends tax credits for state wind energy earlier than planned. Pool Photo by Aude Guerrucci /UPI
Oklahoma Governor Mary Fallin signs measure that ends tax credits for state wind energy earlier than planned. Pool Photo by Aude Guerrucci /UPI | License Photo

April 18 (UPI) -- Oklahoma is resting on its laurels in the renewable energy sector by signing legislation ending tax credits for the wind industry, the state's governor said.

Gov. Mary Fallin put her signature on a bill that ends tax credits for wind power, effective July 1. In a statement, the governor said the tax credits were part of a comprehensive energy strategy that left wind accounting for more than 25 percent of the electricity mix in Oklahoma.


"With the support of the zero emissions tax credit, our state has become a national leader in wind energy," she said. "Currently, Oklahoma ranks third in the nation in total installed wind capacity."

The governor's signature ends the tax support three years early, though polling data from the state suggest most voters would prefer the state put its revenue focus on education. Her budget plans for 2018 said wind power was supported to the point it was now a major player in the energy sector and further state support was no longer needed.

Instead of tax credits, the governor called for a tax on wind energy of $0.005 per kilowatt-hour produced.


Jeff Clark, president of the Wind Coalition in Oklahoma, said phasing out the wind incentives could help offset the strains brought on by lower oil prices. Wind investments have already steered more tax revenue toward local schools and rural communities. But adding tax pressure to wind could be a blow to future momentum.

"The future of Oklahoma energy can be bright as it is a state rich in oil, gas, wind, and solar resources; but the future is unclear," he told UPI. "Until the anti-investor rhetoric in some quarters of the capitol dies down, industries and investors of all types will be hesitant to step forward with new capital intensive investments."

Oklahoma is one of the top contributors to total U.S. oil production, accounting for about 5 percent of the nation's total output. State Treasurer Ken Miller said that, as exploration and production activity gains traction in response to improving oil prices, the economy in the state is showing signs of life.

Data for March show tax collections from oil and natural gas production more than doubled year-on-year to $47.9 million. For the economy as a whole, however, total collections of $915 million were down 2.7 percent from March 2016.


Despite the recovery, state coffers are still under pressure. During the last 12 months, the state collected $391.5 million in oil and gas production taxes, down $11.8 million from the previous period.

With the state facing a budget crisis in 2017, the Oklahoma Oil & Gas Association called for an overhaul of state regulations that stand in the way of more oil and gas drilling. Fallin, who last year called for a state Day of Prayer for the oil and gas sector, said the wind energy tax credit was a critical part to state investments.

"It is time to ensure that Oklahoma has a bright future, and continues its position as a prominent energy state," she said.

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