Texas, Okla. Consider Eliminating Wind Incentives

Bills to eliminate incentives that have accelerated the expansion of wind power found momentum in Texas and Oklahoma last week. 

Texas Moves to Nix RPS, CREZ

The Texas Senate on April 14 approved, by a 21–10 vote, legislation that would end the state’s Renewable Portfolio Standard (RPS) and its Competitive Renewable Energy Zone (CREZ) program.

The state’s RPS was originally adopted in 1999 and called for 2 GW of new renewable energy capacity to be installed statewide by 2009. In 2005, the Texas legislature expanded the program to accommodate 5,880 MW by 2015 and included a target of 10 GW by 2025.

In 2008, meanwhile, the Public Utility Commission of Texas assigned $4.93 billion of CREZ transmission projects to seven utilities to transmit 18,456 MW of wind power from West Texas and the Panhandle to highly populated metropolitan areas of the state. The project was completed in 2013.

Both initiatives have helped increase the exponential growth of wind power in Texas, says the American Wind Energy Association. In its recently released U.S. Wind Industry Annual Market Report Year Ending 2014, the industry group says the state boasts 14 GW of wind power capacity—more than any other state. The Electric Reliability Council of Texas (ERCOT)  says it produces about 10.6% of its generation from wind energy.

If the two programs are scrapped, Texas generators would no longer be required to participate in its renewable energy credit trading program. According to Sen. Troy Fraser (R-Horseshoe Bay), who introduced Senate Bill 931, has argued that the state has long surpassed its renewable energy targets.

The bill now heads to the House, where because it has no companion, it will need a sponsor and committee assignment.

Oklahoma Reviews Tax Incentive

In Oklahoma, meanwhile, a bill to eliminate property tax exemptions for the wind sector passed the House by a vote of 78–3 last week. The measure now moves to the Senate, which will review a companion bill introduced by Sen. Mike Mazzei.

Mazzei said in a statement that the state’s total impact of tax breaks for current and planned wind facilities would have ballooned to at least $700 million over a 10 year period.

“I have long supported the use of incentives to boost job growth, but I believe there is an increasing awareness that we must exert greater oversight over these incentives to make sure they are doing what they were designed to do without costing more than they generate for our state.”

According to AWEA, Oklahoma ranks as the state with the fourth most wind power capacity in the nation—after Texas, Iowa, and Colorado.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)

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