An Oklahoma bill that would cap tax credits for generating wind electricity and, at the same time, impose a tax on such electricity fell short of the number of votes needed to pass the state house of representatives in mid-February.
However, another vote is expected before the legislature adjourns in May.
Tax increases require a 3/4ths vote to pass.
The vote for the bill was 63-35 in the 101-member house of representatives after oil and gas interests turned against the bill because it would double an initial gross production tax on oil and gas produced from wells during the first 36 months of production.
The legislature must find a way to plug a budget gap before it adjourns.
The state allows a tax credit of 0.5¢ a KWh of wind electricity for 10 years after a project is first put in service. The state moved up the in-service deadline to July 1, 2017 from the end of 2020 last year to save money.
The bill would cap the credits that can be claimed each year at $18 million.
It would also impose a tax on wind electricity of 1¢ a KWh, or twice the tax credit amount.
If the tax is imposed, Oklahoma would become the third state to tax wind electricity. Wyoming taxes wind electricity at 0.1¢ a KWh. South Dakota imposes taxes of 0.065¢ a KWh on wind farms that commenced operating between July 1, 2007 and March 31, 2015 and 0.045¢ a KWh for wind farms that went into operation more recently.