OKLAHOMA CITY – A tax bill that targets Oklahoma’s renewable energy industry had not been brought up for a floor vote in the state House of Representatives as of March 1.
House Bill 2950 proposed by Speaker Charles McCall (R-Atoka) would impose a levy of $1 per megawatt- hour of electricity produced by wind, solar, geothermal, biomass and hydroelectric power facilities in the state.
A House projection of the fiscal impact of the measure did not include any estimate of how much revenue such a tax would raise.
It came to light following lengthy efforts to reach a compromise between those who want utilities to have the power to construct major transmission lines without competitive bidding.
The tax on renewables is part of a bill to reduce income taxes for Oklahomans. The Speaker’s bill would authorize a 0.25% personal income tax cut for all brackets, lowering the top marginal rate from 4.75% to 4.50% effective with tax year 2024.
Although there was no movement by the Speaker to call for a vote on his measure last week, observers described it as a “live round” in his “hip pocket,” meaning he could still proceed despite a deadline for committee bills to be moved.
Normally, House bills are subjected to a fiscal impact analysis performed by House staffers. The fiscal report obtained by OK Energy Today showed only a projected revenue loss from the proposed personal income tax cut, and did not include a projection of the tax revenue that would be generated from the proposed tax on renewable energy.
McCall’s bill came to light last month after wind operator NextEra Energy maintained its strong opposition to giving utilities the ‘right of first refusal” in construction of major transmission lines. ROFR, as it’s often referred to, drew opponents and proponents over the past year when it was first introduced.
“Not a new issue for us,” said Cody Bannister, senior vice president of communications for the Petroleum Alliance of Oklahoma. “We’re happy there’s finally a discussion.”
“The wind industry is a competitor for natural gas and that’s not a good idea,” said Bannister, who believes there will be more renewable energy growth in the state because of federal mandates issued by the Biden administration.
It was in the 2023 legislative session when Petroleum Alliance President Brook Simmons raised the idea of taxing wind and solar.
“Any discussions on increasing taxes on energy production, even hypothetical, should begin and end with instituting a statewide production tax on wind and solar,” Simmons said at the time. “We are not, however, an ‘all of the above’ state when it comes to energy taxation. Only the oil and natural gas industry pays a statewide gross production tax on the energy it produces.”
“Tax consuming industries” in Oklahoma paid “less than nothing” last year, Simmons charged. He claimed that since 2013, Oklahoma taxpayers had paid more than $1.25 billion in subsidies for wind power generation, and hundreds of millions of dollars more were set to be paid out through 2026.
Last week’s oil and gas industry ads supporting McCall’s bill aren’t the first time the fight has gone public against the wind industry. In 2016, the oil and gas industry utilized billboards to target tax credits for the wind industry.
One declared: “Cost to Oklahoma taxpayers in 2016 is $242 million. Outof- state wind companies benefited. That BLOWS.”
It was discovered that the billboard campaign was promoted by the Windfall Coalition, a nonprofit group started by billionaire Harold Hamm, founder of Continental Resources. Hamm was supported by Pete Delaney, the former chairman and CEO at OGE Energy Corp. Another supporter was Jeff McDougall, president of JMA Energy Co.
The coalition also took out a $33,000 full-page ad in The Oklahoman.
The wind industry countered with its own billboards. The wind operators had support from then-Rep. Cory Williams (D-Stillwater).