Controversy over wind farm credits blows through Capitol 

OKLAHOMA CITY – The state’s burgeoning wind industry is a constant source of frustration for Calumet resident Tammy Huffstutlar. A wind turbine on her neighbor’s land has devalued her home, sparked a long legal battle and meant the loss of peace, she said.

“I’m just angry right now,” Huffstutlar, who said she does not have any turbines on her property, told legislators Wednesday. “Living in the middle of this wind farm has changed our lives completely.”

The same industry that Huffstutlar despises is a godsend for Lamont resident Chad Muegge.

The Grant County farmer and banker receives $27,000 in annual royalties to lease his land to wind companies. That’s allowed him to send his children to college and care for a terminally ill family member.

Starkly different pictures of the expanding industry were painted during a hearing at the Capitol to consider whether the state should adjust tax incentives that support wind energy producers.

At times, it was standing-room-only in the meeting room as people on both sides of the issue listened.

Proponents of wind development – many from northwestern Oklahoma – described an industry that is stimulating rural economies, supporting thousands of high-paying jobs and propping up farmers who are struggling to overcome rough years due to a lingering drought.

“Farmers and ranchers were begging for a way to diversify their economy,” said Vicki Ayres-Portman, with the Oklahoma Panhandle Regional Economic Development Coalition.

Ayres-Portman said she was speaking on behalf of a number of economic development groups in northwest Oklahoma, including the Enid Regional Development Alliance.

“This has become a real way for their land to survive in their family and to be passed down from generation to generation,” she said, adding that the state needs competitive tax incentives or risks losing the industry to neighboring Kansas and Texas.

Opponents portrayed those same tax credits as a skyrocketing, uncontrolled expense that the state can ill afford.

Rick Mosier, with the Claremore Oklahoma Property Rights Association, said the tax breaks pose a “looming and unintended” liability.

The Oklahoma Tax Commission has said it expects to pay nearly $12 million to producers of renewable energy – mostly wind farms – in zero-emission tax credits this year. The commission projects those payments to swell to $19.1 million by 2018.

Businesses are eligible for credits based on the amount of energy created by their facilities during the first 10 years of production.

Companies can apply credits to lower their tax payments to the state, then cash in unused credits. For example, a company with a $100 tax credit that only owes $50 in taxes can sell the remainder of the credit, or $50, back to the state for 85 cents on the dollar.

The reimbursements come from the state’s income tax fund.

When the industry first started developing, few companies claimed the incentives. State records show that number is climbing each year, as more wind farms are operational, Mosier said.

“Can the state of Oklahoma afford to pay?” he said. “I submit to you, they cannot. It’s a blank check, and we can’t afford it.”

He urged lawmakers to consider capping the amount that wind producers can claim, as well as regulations to protect homeowners from the expanding industry.

Rep. David Brumbaugh, R-Broken Arrow, said the Legislature is trying to balance what it can pay now and what it can afford in the future.

While promoting the industry’s benefits, Jeff Clark, executive director of the Wind Coalition, acknowledged the importance of reviewing tax credits.

“The incentives, as they are currently structured, create some anxiety,” he said, acknowledging that a lack of predictability creates budgeting issues. “We want to take some of that anxiety to craft a benefits package that is predictable and takes away some of that anxiety.”