Thursday, April 20, 2017

Oklahoma Ends Eligibility for State Wind PTC

Oklahoma Governor Mary Fallin signed legislation that ends the eligibility of new wind projects for the state’s production tax credit.  On April 17, 2017, the Governor signed House Bill 2298, which limits the eligibility of the tax credit to wind projects that are placed in to service no later than July 1, 2017.

The tax credit had been scheduled to expire on January 1, 2021. The credit is worth one-half of one cent per kilowatt hour of production. Plants currently in operation will continue to be eligible for the tax credit.

Oklahoma’s legislature had considered several measures in recent years to limit the availability of the tax credit to help address the state’s budget deficit. The annual cost of the credit had grown to more than US$113 million as of 2014.

In part because of the tax credit, Oklahoma is third in the American Wind Energy Association’s report on installed wind capacity. It remains to be seen what effect the sunset of the credit will have on the development of future wind projects in the state.  EDP Renewables and EDF Renewable Energy both have wind farms under construction that may no longer quality for the credit.