In 2001, when I served as governor of Oklahoma, I signed legislation creating the Zero Emissions Tax Credit for industrial wind energy. The tax credit was designed to give a jump-start to a wind industry in its infancy in Oklahoma at the time. It was sold to us as a low-cost way to broaden our already robust energy and economic development program. It was supposed to create jobs and develop a more prosperous future for Oklahoma.
Signing this legislation was simply a mistake. What was promised to cost the state less than $2 million annually when I was in office has soared to $113 million for the 2014 tax year and is expected to cost billions in the future. Wind farms average 10 percent to 13 permanent jobs, which hardly lives up to the promised employment growth.
Because the tax credits weren’t limited or capped, the Zero Emissions Tax Credit has warped into a scam costing taxpayers millions to the detriment of other publicly funded services. In 2014, the credits became directly refundable, meaning the state writes wind companies checks for 85 percent of the value of each credit. That’s essentially a blank check funded by taxpayers that goes to multibillion-dollar corporations based outside of Oklahoma and mostly located in foreign countries. It’s the worst kind of corporate handout.
I’m shocked and dismayed that taxpayer money has been spent so recklessly and at the cost of funding Oklahoma’s education system, which we know continues to be at risk. Because of power purchase agreements with other states, people outside of Oklahoma enjoy the majority of this discounted power, thanks to the subsidies we fund. Yes, this really happens!
If you’re not upset yet, just wait because it gets worse. The wind industry will tell you there are already controls in place because the current law sunsets these credits in 2021. However, Oklahoma pays these billion-dollar wind companies for the electricity produced by each turbine for 10 years. Turbines put in operation this year will receive tax credits until 2027. Under current law, payments will continue until Jan. 1, 2031, for turbines placed in operation before Jan. 1, 2021.
The wind industry is also not telling you about plans to accelerate the pace of construction so it can benefit from these subsidies on more than four times as many turbines as the number that generated the $113 million claimed in 2014. This considerable growth could cost us up to $5.2 billion by the time the last bill is paid.
The costs will continue to rise, opportunity for education will be lost and taxpayers will be on the hook for billions if we don’t act now. Decisions made now will affect, and perhaps destroy, our state government financially over the next 14 years.
As your former governor and a proud citizen of Oklahoma, I encourage us all to work together to end this subsidy no later than July 1, 2017, before the planned growth compromises our future. Together, we can and we must protect Oklahoma.