Wind Group Pushes Back Against Proposed Gross Production Tax for Renewable Energy

Feb 6, 2018

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A wind power organization said Tuesday they support a fair tax structure, but the Step Up Oklahoma plan doesn’t offer that.

Members of OK WindPower said the proposed $1 per megawatt hour gross production tax on renewable energy would be levied in addition to property taxes wind farms pay but oil and gas firms don't. Former Garfield County Assessor Wade Patterson said assets can’t be double taxed in Oklahoma, creating a problem for more than 50 schools where a wind energy business is the No. 1 taxpayer into county sinking funds.

"If you remove any of this ad valorem from the local level — that sinking fund has to be satisfied each year — you’re simply going to have to take the amount of bonded indebtedness and divide it by everyone else that’s there," Patterson said.

OK WindPower Executive Director Mark Yates said besides wind farms being completely different from oil and gas drilling, the ad valorem taxes they currently pay are equivalent to a 10 percent gross production tax.

"If we’re going to be painted into a corner and compare between oil and gas and wind, we will take the same exact tax structure as oil and gas," Yates said.

The group's alternate proposal is for the state to tax all power plants on "Megawatt Nameplate Capacity."

"Take all the megawatts of wind and put a $2,000 tax on it to bring that to the state level, and then have the slight, corresponding offset so that we avoid double taxation," Yates said.

Either tax structure includes offsets for local governments. Yates said wind farms paid $74.5 million in ad valorem taxes last year and were the number one taxpayer in 14 counties.

The $1 per megawatt hour gross production tax included in the Step Up Oklahoma plan is written into Gov. Mary Fallin's executive budget. Yates said a renewable energy gross production tax threatens the further development of the wind industry in Oklahoma, which is now the nation’s No. 2 producer of wind energy.