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Roth: Putting politics aside for renewable energy

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 27, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Putting politics aside for renewable energy

Green cities continue to emerge from the coal dust.

Optimistically, some leaders are even proving they will rise above politics with their efforts. After all, clean energy should not (and is not) about politics, anyhow.

Lately renewables are being chosen over other forms of energy for reasons of “dollars and sense.” I recently happened upon a piece about a Texas city that will be the first to use 100 percent renewables in U.S. News, which led me to that publication’s list of the 10 states using the most renewable energy. The top 10 are a bit surprising and extremely promising, especially when you consider all the abundant clean energy here in Oklahoma.

In these 10 places, it’s not about whether they were likely to have supported Obama’s Clean Power Plan or Trump’s plan to eradicate it; these leaders have run the numbers and are implementing renewables accordingly, because it’s in their citizens’ economic interests.

That Texas city, the city of Georgetown, despite being extremely conservative, is one of the first cities in the country to use 100 percent renewables. The mayor there, Dale Ross, intends for his legacy to be that the environment in his city, and thus the planet, will be better because of Georgetown’s efforts.

Renewable energy just makes sense, say Mayor Ross and other city leaders, so politics didn’t (and shouldn’t) play a role in the decision. When the city was looking for a new energy provider, they discovered that after deregulation of retail energy, renewables were more cost-effective. Additionally, policies former Texas Gov. Rick Perry put in place allowed for the installation of large generation tie lines to bring wind across the state from the windy west side. As a result, Georgetown locked in their rates with wind and solar energy for 20 years.

I love the mayor’s quote regarding that decision, “Do you think that the wind is going to stop blowing in Texas, and the sun is going to stop shining in Texas, before or after we run out of fossil fuels?”

Oklahoma has a chance to put politics aside, too. When something is cheaper and cleaner, logic should conquer politics. Recently, my friend Johnson Bridgwater, who runs the Oklahoma Chapter of the Sierra Club, spoke about Oklahoma’s solar energy potential (it is enormous). He pointed to a map of the U.S. that indicated states with excellent “peak sun hours,” or those with the best potential for solar energy, and asked, “If this map revealed our oil and gas plays, would we sit on them?” No way. We’d materialize that energy. Which is what I hope our state will do. Our energy potential is before us, if we have the courage to remove politics and act in our citizens’ collective interests.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: The Senate tax bill’s effect on energy

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 20, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The Senate tax bill’s effect on energy

Last week I considered how the House tax proposal would impact the energy industry. With the release of the Senate’s proposal, we now wait to see how Congress will merge these two versions. The current schedule has them submitting a bill to the president before year-end.

As a refresher, the House plan severely injured renewables, hitting wind the hardest, with its early sunset of vital tax credits including both the investment tax credit and production tax credit. Not the Senate bill, though – it leaves those in place. It also leaves the marginal well credit in place, a fact that many Oklahomans will appreciate.

One positive feature of the Senate’s version is its silence on the electric vehicle credit. The House bill removed a $7,500 incentive for EV car buyers.

The incentive was achieved via a bipartisan effort aimed at bringing parity between electric and combustion engine vehicles. Since the incentive was put in place, every major car manufacturer has unveiled plans to increase its electric vehicle production. Some companies, like Volvo, pledged to make all of their vehicles electric (hybrid or plug-in) or “electrified” (a non-plug-in electric version) beginning in 2019.

The EV component is really important to the renewable energy story, as it will no doubt be a catalyst for those who are reluctant to embrace other types of green living such as installing solar panels on their roofs or a geothermal system underground.

Other key differences between the bills are that the Senate’s version also cuts the corporate tax to 20 percent, but not until 2019, where the House’s cut would go in to effect after Dec. 31. Unlike the House’s proposal, the Senate version does not eliminate any brackets, but does lower rates more than its House counterpart.

The Senate bill treats small business pass-through entities differently – more favorably – than the House bill. There are a vast number of oil and gas related pass-through small businesses in Oklahoma that would stand to benefit.

While the Senate version is far more courteous to the energy sector than its House counterpart, there are still many things left to contemplate. For one, two major promises by congressional Republicans have been the repeal of Obamacare and tax reform.

The Senate bill attempts the old two birds, one stone idiom with its repeal of the Obamacare individual mandate. This relates to the energy industry as so many oil and gas companies and affiliates are small businesses, which often means many of their employees are independent contractors. Obviously this repeal would lower tax rates for all Americans, but its wide-reaching effects on the state of health care in our country remains to be seen. It is estimated that remaining insured Americans would see an increase of 10 percent in their premiums, which might actually exceed the tax break savings the bill otherwise proposes for middle-income Americans. Stay tuned.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: A victory for fossil fuels over renewables

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 13, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

A victory for fossil fuels over renewables

At this juncture, it isn’t shocking to read the new tax proposal and learn that it harms renewable energy.

The headlines immediately bifurcated the energy sector into winners (fossil fuels) and losers (renewables). Retention of many long-standing fossil fuel breaks and incentives were an unsurprising boon for oil and gas companies, while the phase-out of many energy efficiency-related investment tax credits have the green energy industry angry and activated, and rightfully so.

It is counterintuitive that the tax proposal injures wind so badly, since it is proven, efficient, and reliable, and complements well with natural gas as the least expensive power source(s). While logic can’t be tied to the attack on wind, politics can. The tax proposal keeps in line with the current administration’s efforts to favor fossil fuels, especially coal, no matter how dirty or expensive. Plus, the revenue yanked from wind incentives goes to fund the newly created corporate tax revenue hole, which the Congressional Budget Office estimates this past week is the largest part of the $1.7 trillion estimated the GOP plan adds to America’s debt.

Subtitle F (the proposal’s heading dealing with energy credits) inadvertently got the letter grade it deserved as it outright fails renewable energy. Under the plan, the $7,500 tax incentive on electric vehicles is eliminated. States that mandated goals for zero-emission vehicles did so with an expectation of the incentive. Not to mention EV car companies whose business projections are based on the existence of the tax credit and a chance to keep American car manufacturers competitive with the world.

This section also contains certain repeals of oil and gas incentives, too, namely, the repeal of tax credits for marginal wells. This is especially negative for Oklahoma as the age and extent of our historic oil and gas production means we still have a significant number of marginal wells at work here in Oklahoma. Since many of these are owned and operated by mom-and-pop companies, it seems the GOP draft favors today’s large corporations over small businesses, at least as it relates to oil and gas marginal wells.

Another less obvious way the plan helps oil and gas corporations and harms renewable energy developers is the latter’s reliance on tax equity investors. Larger exploration and production-companies will benefit from the new corporate tax rate of 20 percent, down from 35 percent. But the model for many renewable energy projects relies upon, among other things, tax equity financing. When tax exposure is lower, it could follow that there would be less interest in tax equity financing projects, of all kinds, and especially energy.

Nevertheless, I remain steadfast in my confidence for our state’s and nation’s diverse energy future. Of course this optimism is buttressed by the reminder that there are still forthcoming amendments, and this plan will not likely become the final law. The bill, as proposed, violates the “Byrd rule,” a Senate reconciliation rule that, in part, allows senators to block legislation when it would considerably increase the federal deficit beyond a 10-year term.

So far, there are over a trillion reasons either of our two U.S. senators could block this draft and insist it be rewritten to help all forms of Oklahomans’ energies. Stay tuned.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Director Jim Roth introduces Facebook CEO Mark Zuckerberg to Oklahoma, state’s clean energy potential

Mark Zuckerberg, Facebook founder and CEO, visits NextEra Energy with Jim Roth, Phillips Murrah Director and Chair of the Firm’s Clean Energy Practice Group

Jim Roth, Phillips Murrah Director and Chair of the Firm’s Clean Energy Practice, was quoted in a Duncan Banner article by Katherine Farrow regarding a recent meeting he and Facebook CEO Mark Zuckerberg had in Duncan, OK on Nov. 8 in regards to Oklahoma’s clean energy future.

Read Roth’s comments from the article below:

Jim Roth, Director and Chair of law firm Phillips Murrah’s Clean Energy Practice Group, said that he was contacted by Zuckerberg’s office approximately four months ago to set up the visit.

“Mr. Zuckerberg has undertaken a year of travel challenge where he’s going to all parts of America, and particularly states he’d never been to before — his office reached out to me about four months ago — inquiring about if they were to come to Oklahoma, what would I recommend they see,” Roth said. “I began to describe to them the promise of Oklahoma’s wind energy and future solar energy and that seemed to pique their interest.”

Kismet dictated that Zuckerberg and his team would be visiting the week before Veteran’s Day, and Roth knew that wind energy giant NextEra would be the perfect destination due to their veteran-friendly hiring policies.

“One of Oklahoma’s larger wind developers also has a program where they actively recruit and employ veterans and this week of his planned visit being near Veteran’s Day, I think that was also interesting to them,” said Roth. “So, it was nice that NextEra wind energy, with its Rush Springs wind project that came online just last year, was able to play host.”

Zuckerberg spent his time at the wind farm speaking with wind technicians, land owners and neighbors of the project about the ways wind energy has been beneficial to their lives.

“Mr. Zuckerberg wanted a chance to have a casual, relaxed, engaging conversation with actual Oklahoma wind technicians,” Roth said. “He asked that some surrounding neighbors and landowners that had turbines on their properties come and join and sit down for lunch. So, it led to just a really great dialogue where he asked questions and they provided some neat answers and he got to learn about — what it takes to be a certified wind technician. What other careers that some of those employees had — before and why they loved being in wind energy today. He’s heard from the landowners, their appreciation for how the funding goes directly to local schools, how the wind turbine royalty payments have helped their farms with some secondary income and generally just had a really nice exchange. He’s very gracious, the guests and the wind techs — had a great time engaging with him and all in all it was definitely a nice conversation.”

A look at a horizontal blade that was on the ground as well as a tour of an actual wind turbine and tower were two of the items on the agenda for Zuckerberg, who according to Roth, very much enjoyed the time spent and knowledge gleaned from the experience.

“He just talked about how kind everybody was — how much he enjoyed it, I think he really enjoyed the back-and-forth with the local landowners and the wind-techs, so I would say all-in-all he seemed to have a really positive experience,” Roth said.

Even Zuckerberg’s advance team enjoyed their look at Duncan and the surrounding areas, according to Roth. The team reportedly was in the area several days in advance to make sure the visit ran smoothly and had nothing but glowing reviews for Duncan and Stephens County.

“—His team had arrived a few days in advance, enjoyed themselves in Duncan, had a chance to site visit the day before just to make sure everything went smoothly,” said Roth. “They shared with me they had a wonderful, positive visit to Duncan and they loved, ‘How friendly everyone in Duncan is.’ ”

Roth said he was extremely impressed with Zuckerberg, as well and hopes to be able to boast of another Facebook founder visit to the state someday.

“There’s just this human element, right? Where he arrives in jeans and a hoodie and is unassuming and was just down-to-earth and very gracious and treated everybody equally. I saw him really demonstrate a level of intellectual curiosity and just a graciousness toward people that was nice to get to witness firsthand,” Roth said. “I’m thrilled that — they had such a good visit and I hope they’ll come back and even invest more in Oklahoma.”

Read the full article from the Duncan Banner.

NewsOK Q&A: Manufacturing sales tax exemption is tool for attracting, maintaining investment

From NewsOK / by Paula Burkes
Published: November 3, 2017
Click to see full story – Manufacturing sales tax exemption is tool for attracting, maintaining investment

Click to see Jim Roth’s attorney profile

Jim A. Roth, Phillips Murrah

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Q: What is Oklahoma’s manufacturing sales tax exemption?

A: Goods and equipment used in a manufacturing operation can be purchased exempt from sales and use tax by manufacturers. This type of sales tax exemption is designed to attract and promote business. It’s a proven tool that governments employ to make their communities more attractive. The rationale is simple: draw out-of-state investment and keep in-state investment rather than relinquishing that investment (and the associated jobs, taxes and infrastructure) to a competing location.

Q: What is the relevance of the sales tax exemption to the energy industry?

A: Under Oklahoma law, the term “manufacturing” includes the conversion of materials and natural resources into other materials that have a different form or use. This definition encompasses processes ranging from the manufacturing of oil field equipment to petroleum refining. Electric power generation is also considered manufacturing. As a result, power generators such as natural gas-fired power plants, coal-fired power plants and wind energy facilities are deemed manufacturers and are permitted to purchase equipment to be used in the power generation process exempt from sales and use tax. Ultimately, the exemption is designed to help qualifying energy companies stay afloat — especially during capital-intensive phases — and keep investing in Oklahoma.

Q: This exemption has been a hot topic at the state Capitol during special legislative session. What are some of the issues at hand?

A: Oklahoma is facing a historic budget shortfall, with risks of further cuts to state agencies becoming a very real possibility. Legislators are searching for dollars to help plug financial holes before the ship sinks, and many of our state’s tax incentives and exemptions may be on the chopping block. There has been discussion of removing wind energy companies from access to the manufacturing sales tax exemption. While wind developers have made it publicly clear they’re already invested in Oklahoma to the tune of billions and plan to stay for the long haul, it’s important to revisit the reason for such exemptions in the first place and consider that the opposite is also true: if certain companies or industries are punitively cut out of such exemptions while still paying millions in taxes, it may make Oklahoma a difficult place to do business, which will, in the long run, discourage investment and aggravate our state’s budget problems.

 

Roth: The potential of offshore wind production

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 16, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The potential of offshore wind production

There have been so many exciting clean energy topics to cover lately that I want to circle back to one that was announced in late summer.

We know onshore wind development costs continue to decrease, but as Seb Henbest from Bloomberg New Energy Finance indicated, (hinting at that group’s National Energy Outlook report) offshore wind costs are expected to fall even more rapidly than those of onshore wind. The in-depth report considers factors that will shape the sector to 2040.

This prediction is all the more likely thanks, at least in part, to U.S. Sens. Tom Carper, D-Del., and Susan Collins, R-Maine, along with 10 of their colleagues from states all across the nation, who have introduced a bill that will encourage the development of offshore wind.

The legislation, if passed, would incentivize developers using a 30 percent investment tax credit redeemable for the first 3,000 megawatts placed into service. In an environment where incentives are being swiped from our local wind developers, it is refreshing to see a group of our nation’s representatives, diverse in both their geography and political affiliations, propose such a productive industry expansion bill.

The lawmakers suggest that volume of energy capacity would require the development of 600 wind turbines. Emphasizing the critical role the tax credit would play, the bill proposes to incentivize the first 3,000 megawatts, rather than a specific cutting off the credit on a specified date. The legislation defines “offshore facilities” broadly, including any facility located in the inland navigable waters of the United States, such as the Great Lakes, or in coastal waters including the territorial seas of the United States.

What makes this exciting is that while there is the potential to power the entire east coast with offshore, as with all burgeoning technology, costs are high. But as Europe has demonstrated, a little incentive goes a long way. The result: increased investment combines with advances in technology which lead to rapid declines in cost. It is a proverbial win-win. Or, as the authors of this new legislation called it, a “win-win-win” (domestically-produced, renewable power, cleaner air, and more American jobs).

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Energy policies should communicate Oklahoma is open for business

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 9, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Energy policies should communicate Oklahoma is open for business

Oklahoma wind’s positive impacts on our state are well-documented: more than $12.3 billion invested, more than 8,000 home-grown jobs and $22 million paid annually to farmers and ranchers in the form of land-lease payments, in addition to myriad other benefits. What’s more, wind energy is infinite, and its reliability has helped steady electricity costs and lower utility bills for citizens statewide.

As special session marches on, there’s no doubt our state legislators have their work cut out for them – we’ve got a historic budget hole to fill. However, we must be careful not to make decisions in a panic today that will permanently damage our state’s long-term economic health.

When other industries were forced into hiring freezes, wind energy was hiring. When drought struck Oklahoma’s farmlands, wind energy was there to supplement farmers’ and ranchers’ incomes with land-lease payments. When rural schools started suffering without resources, wind energy companies hand-delivered school supplies. Additionally, the industry is projected to pay in excess of $1.2 billion in property taxes through 2043 directly funding public schools.

However, with stakes high at the state Capitol, anti-wind special interests, lobbyists and some legislators are targeting wind energy yet again, calling for punitive measures that would place an unfair burden on this industry, even after wind energy has given up every industry-specific tax incentive. It’s important Oklahomans and our elected officials know the truth so they can protect themselves from rampant misinformation about an industry that’s invested so much in our state.

The latest threat from the anti-wind lobby surrounds Oklahoma’s manufacturing sales tax exemption, which enables any company operating in Oklahoma that applies for a specific permit the opportunity to take advantage of this exemption to offset its operation costs for purchases of machinery and equipment, energy and tangible personal property used in design, development and manufacturing. These special interests want to single out wind energy and keep them from claiming this exemption, even while all other manufacturing industries – including other members of the energy industry – are still able to participate. It just doesn’t make sense.

Exemptions like these are common and proven tools for attracting outside business investment and keeping existing business investment in a given area. Energy projects across the spectrum are known for being very capital-intensive, and often millions have been spent and countless jobs created before oil and gas companies start drilling or wind companies install turbines.

Punitively removing one industry from this exemption’s benefit only stands to drive wind energy investment to friendlier states, taking their jobs, landowner payments and taxes with them. And the risk of losing investments to neighboring states is real. Developers warn me that such a repeal would be a self-defeating step, as dollars leave the state. It is estimated that wind in Oklahoma would then be 30-50 percent more expensive than in Texas, Kansas and Nebraska. Further, Oklahoma will miss out on new investment opportunities with our Southwest Power Pool expanding to include Colorado and Wyoming, as the SPP buys electricity on low price alone. Now is not the time to drive energy investment out of Oklahoma.

We must start thinking long-term, showing diverse industries that Oklahoma is open for business. As our elected officials gather next week for special session, I’ll be calling my legislators asking them to support wind energy and keep wind investing in Oklahoma. I hope you’ll join me.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: National Clean Energy Week

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 2, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

National Clean Energy Week

Friday marked the end of the inaugural National Clean Energy Week. The brainchild of several energy groups and associations, the idea is to give clean energy the attention it deserves.

I, for one, am happy to oblige. Imagine this: You electrify your house with rooftop solar panels, perhaps those are backed by a Tesla home battery that provides a charge to your electric vehicle while you sleep, your geothermal system heats and cools your home using heat from the Earth’s core, and water for a hot shower comes thanks to a solar water heater.

Where any of this technology fails to provide the power you need, the local utility provides wind power and when that is intermittent, it is backed by the cleanest of the fossil fuels, natural gas. All of this is quite achievable, especially in Oklahoma, and we should all consider these innovative and renewable energies, even after the close of National Clean Energy Week.

As you ponder that, consider these recent highlights from each major renewable energy source that power our lives – wind, solar, geothermal, electric vehicles.

Wind: A newly introduced U.S. Senate bill would create a new investment tax credit to kick-start offshore wind. I look forward to following and discussing this in the future. Here in Oklahoma, the exciting news to keep your eye on has to be Public Service Co. of Oklahoma’s announcement of the Wind Catcher project that would provide PSO and SWEPCO’s areas with 2,000 megawatts of wind from the Oklahoma Panhandle.

Solar: As discussed last week, the holding pattern continues as the entire solar industry awaits the outcome of the International Trade Commission tariff case. Solar has made huge strides in the past few years and it is widely believed that it will overtake wind in the next decade or so. American jobs in solar grew at a 25-percent pace over last year to 260,077 today. The growth projections for solar energy (and solar jobs) are pretty striking since today the total U.S. installed solar capacity is around 40 gigawatts, while wind sits at approximately 82 gigawatts.

Geothermal: The science and mechanics of this source is tried and true. The perpetual heat that can be pumped using geothermal systems within “about 33,000 feet of Earth’s surface contains 50,000 times more energy than all the oil and natural gas resources in the world.” Geothermal has wide application from residential backyards to large power plants. Ask anyone who has a system installed and prepare to be shocked at how low their utility bills are all year long.

Electric Vehicles: Dyson, the company that made us enjoy vacuuming again, just announced it will join the EV industry with plans to have its version available in 2020. If Dyson remains true to its brand, the car is sure to be simple and sleek.

Move over, Elon Musk? But seriously, Tesla continues to keep us in awe, this time with a touch-screen in place of traditionally built-in dashboard controls in the new Model 3. That one starts at $35,000 and gets 220 miles of range, and may finally be in range for more consumers. Moreover, if you do not want a Tesla, there are 12 other EV choices in America today. The projections are that by 2040 more than one-third of all vehicles will be electric or plug-in hybrids.

So while it is clear that clean energy is becoming a daily thing every year going forward, the first Clean Energy Week has just concluded, but really, it has just begun.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Energy industry provides help for public schools

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 14, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Energy industry provides help for public schools

School bells begin to ring across the state this month amid severe budget shortfalls. But there is hope yet, as schoolchildren receive inspiration, edification, and subsidization from the energy industry.

Back in 2011, Gov. Mary Fallin’s Oklahoma First Energy Plan listed a number of challenges faced by schools in the state. Among them: K-12 math and science programs are failing to inspire or prepare students to pursue science, technology, engineering, and mathematical careers; and classrooms are growing, but education resources have been strained to keep up in a tight budget environment. And as you probably know, state-level education funding has even been strained much harder since then.

But thankfully, local support remains strong for education and so too do local resources in many areas of the state, thanks to local investments like Oklahoma’s wind energy industry. Data commissioned by the State Chamber reported, “[i]mportantly, the increased revenue provided to school districts containing wind energy projects benefits not only those districts, but districts across the state as well. The calculation of state aid to local school districts takes into account a number of the district’s revenue sources. If, after those sources are tallied, the district’s projected per-pupil revenue exceeds 150 percent of the projected state average per pupil revenue, the amount of state aid supplied to that district is reduced proportionately. This means more state funds are available for the support of all Oklahoma schools.”

Put another, more direct way, when a wind project is located in a rural part of Oklahoma, that massive investment allows those schools to get an increase in local funding, which in turn reduces their need for state funding, which can then help those districts where wind energy projects aren’t located. A win-win.

In Minco ad valorem tax revenue paid by local wind developers helped provide for a new high school. It also makes up about 10 percent of the school’s budget. Even more recently, Okarche was able to construct a new gym, elementary school and agriculture and technology building, rather than deciding between those projects.

Oklahoma has enormous potential for another infusion of local investment benefiting local schools, in the form of solar energy. Solar panels on schools are becoming increasingly popular and affordable. Across the country school solar projects continue to pop up and offer not only reduced energy bills, but serve as unique teaching tools that inspire the next generation of inventors, scientists, engineers, entrepreneurs, and so on. Additionally, the projects have data collection systems which provide teachers with innovative lesson plans and students with interesting data to analyze.

Other Oklahoma energy industry leaders in the state offer direct support to schools, too.

Oil and gas producers not only pay business personal ad valorem taxes at the local level, industry leaders like Devon, Chesapeake, and OG&E provide cash and educational programs directly to schools.

One interesting project is Devon’s Science Giants grant, which delivers resources to educators who have applied with an idea to help spark students’ interest in science, technology, and engineering. These types of company engagements and generosity are fueling and inspiring Oklahoma’s young minds. And we should be grateful for it.

Oklahoma’s diverse energy landscape can benefit so many. From solar panels on schools, to natural gas-powered school buses, to significant local revenue from wind farms, my hope is that our energy leaders will continue to educate, support, and inspire our youth at the local level, and that our energy horizon continues to broaden for every Oklahoman’s sake.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

The wrong approach

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on June 1, 2017.


Eric Davis is an attorney in the Firm’s Clean Energy Practice Group and the Government Relations and Compliance Practice Group. He represents clients in a range of regulatory and energy matters.

By Phillips Murrah Attorney C. Eric Davis

Oklahoma! Where the wind comes sweepin’ down the plain – and if some lawmakers have their way, it will be further taxed as it blows through.

For the wind industry, the tax landscape in Oklahoma changed dramatically in 2017. First, the five-year exemption from ad valorem taxes was allowed to expire beginning Jan. 1. Then the Legislature repealed the tax credit for electricity produced from zero-emission facilities powered by wind. These two tax changes represent millions of dollars annually, which will now be applied to mitigate the state’s revenue shortfall.

Now, a third major proposal has emerged: a per-kilowatt-hour production tax on wind energy, a rarity in the United States. At first blush, a production tax on wind energy may seem sensible. After all, natural gas is used to generate electricity, and it is subject to a gross production tax, so why not also impose such a tax on wind? A closer look, however, shows that the comparison is clearly strained.

Presently, the state’s gross production tax, or severance tax, as state law interchangeably refers to it, applies to the production of mineral resources. Such activities are extracting, or severing, non-renewable mineral resources. However, wind is not severed from the land. Theoretically, Oklahoma can benefit from wind energy for as long as the wind blows.

Also, Oklahoma’s gross production tax on mineral production is imposed in lieu of ad valorem taxes. Wind energy is presently subject to ad valorem taxes, which represent a major source of funding for local governments and schools. Oklahoma State University researchers have estimated that, when considering past and forecasted payments for planned projects, the wind industry will pay more than $1 billion in ad valorem taxes to local communities. If a production tax is levied on wind energy in lieu of ad valorem taxes, this could reallocate that revenue away from local communities.

If a production tax were imposed in addition to ad valorem taxes, it would amount to a double-tax on wind energy. This could discourage further capital investment and raise electricity bills for Oklahomans.

Tax policy is not easy. However, imposing this tax on wind energy because others in the energy industry pay a gross production tax is the wrong approach.

C. Eric Davis is an attorney with Phillips Murrah. His practice focuses on clean energy as well as government relations and compliance.

Roth: Florida taxes oranges?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on February 13, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Florida taxes oranges?

If you were to read a headline that the state of Florida was looking to add a 25-percent tax to the price of oranges, you might scratch your head and wonder why they would intentionally hurt one of their largest industries. In Florida, agriculture is second only to tourism.

Such was my reaction when Oklahoma state leaders unveiled an idea this past week to tax their way out of a recurring budget shortfall dilemma by proposing a new tax on Oklahoma’s wind energy, thereby raising the cost of every single Oklahoman’s monthly utility bill. Wind energy accounted for roughly 20 percent of the state’s total electricity last year, so you can do the math about an increase to 20 percent of your electricity fuel bill.

The proposed $5 per megawatt-hour of wind power generation amounts to an approximate 25-percent increase to the cost of wind power, which is now being developed and sold in Oklahoma at around $20 per Mwh.

It’s also interesting to note that only one other state in America has a tax on wind production and Wyoming, where coal is king, has a $1-per-megawatt-hour tax, a whole one-fifth of Oklahoma’s proposed new tax rate.

Oklahoma has enormous energy blessings in the form of natural gas, wind and oil. Recently, the U.S. Energy Information Administration updated its state rankings and has Oklahoma third in the country in natural gas production and fifth in crude oil production. Oklahoma is now also ranked third in wind power with 6,645 megawatts of wind capacity as of the end of 2016, just surpassing California and now trailing only Texas (20,321 MWs) and Iowa (6,917 MWs).

It’s true what Oscar Hammerstein wrote about Oklahoma in our fabled state song, “…where the wind comes sweeping down the plain, and the wavin’ wheat can sure smell sweet,” yet we probably aren’t “doin’ fine” if we are so desperate to tax one of our leading industries, 25 percent to just make budget.

There’s a better way, if you think there is a necessity to push new taxes on electricity generation. There’s an Oklahoma way. Develop a tax approach that makes pollution more expensive, not Oklahoma’s clean energy. And this is an approach being pitched nationally by a large group of prominent, conservative Republicans, who believe it’s time to tax carbon, a real villain, rather than American energy itself.

Former Secretaries of State James Baker and George Schultz, former Treasury Secretary Hank Paulson, business leaders like Rob Walton, former chairman on Wal-Mart, and many others were in D.C. this month meeting with Vice President Mike Pence and other leaders to detail their blueprint for a $40-per-metric-ton tax on carbon dioxide pollution, with the price escalating over time. And yet the policy would actually protect low-income Americans from higher energy bills, unlike Oklahoma’s proposed wind electricity tax. Under Baker’s proposal, the projected $200 billion to $300 billion in annual revenue from the carbon tax would be distributed to households, by quarterly checks, from the Social Security Administration. It is estimated that families of four would receive about $2,000 a year in payments to them, not from them.

And through it all America would be transitioning, even more quickly to a cleaner energy economy and leading the world.

Oklahoma could lead also by a similar approach, rather than hobbling one of its leading industries, with large investments in the state, by targeting wind. We should target negative aspects of human behavior; such is the justification for increasing cigarette taxes, right?

An Oklahoma pollution tax would make winners out of our state’s cleaner-burning natural gas and wind industries, would drive greater production and demand for both and would in turn reduce health care costs to families and businesses by reducing harmful pollutants in our air. We would send less hard-earned Oklahoma money to Wyoming for imported coal, where we are buying their schoolbooks instead of our own. We would in turn incentivize Oklahoma’s energy future by creating a growing market, not a shrinking one.

“Florida taxes fattening fried potatoes” makes more sense to me than “Oklahoma taxes its own wind.”

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Oklahomans deserve to hear the facts about wind energy

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 20, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oklahomans deserve to hear facts about wind energy

It’s no surprise that a review of taxes and tax incentives has recently garnered significant attention from lawmakers, voters and the news media as legislators worked this session to combat a historic budget shortfall. One of the most scrutinized policies has been the zero-emissions tax credit, set to expire in 2020, which will be the wind energy industry’s only remaining tax credit as of the end of this year.

As an Oklahoman dedicated not just to forward-looking, clean energy solutions, but also as someone who champions a diverse energy economy in our state, I’ve been floored by the misinformation about wind energy espoused recently by some state officials, reporters and other influencers. It’s time to set the record straight.

Perhaps the most egregiously misrepresented topic is the value of the last remaining tax credit in comparison to the dollars wind energy brings to our state, both in terms of corporate, ad valorem and other tax contributions and in terms of investment, jobs and infrastructure.

Some outspoken opponents have nonsensically implied wind energy’s one incentive is to blame for everything from the budget deficit to ongoing declines in general revenue collections. However, they fail to produce numbers that support these claims and do not consider how incentives to other industries – some of which receive multiple incentives – affect the state’s coffers as well. This paints an inflammatory, misleading and inaccurate picture of the billions of dollars the wind energy industry has contributed and will continue to contribute to our tax base and to state and local economies.

For 2015, the wind energy industry will receive an estimated $46 million as a result of this tax credit, a helpful but relatively small incentive compared to other industries, when considering facts such as:

• The industry has invested nearly $10 billion in Oklahoma and plans to continue investing.

• Economists predict wind energy developers will contribute about $1.2 billion in ad valorem taxes alone through 2043, directly benefiting local schools and communities.

• More than 7,000 Oklahomans can attribute their jobs to wind energy.

• Oklahoma’s largest utilities (OG&E and PSO) have locked in over $2 billion in customer savings through their own wind contracts, according to their own statements.

The zero-emissions tax incentive was created with the goal of drawing renewable investment to Oklahoma during a time when we were missing out on these dollars due to more attractive financial circumstances in neighboring states. Because of our incentive, wind energy now produces almost one-fifth of the electricity powering our homes and businesses and provides the cheapest form of electricity to Oklahomans. The case for keeping wind in our diverse energy mix is a strong one. And it’s made even stronger by tough state budgets reeling from a downturn in the oil and gas industries.

I encourage our elected officials, news media and others to check the facts and make sure the full story on wind energy is being told. As November elections draw near and Oklahoma voters evaluate our state’s leadership, its only right they hear the unbiased truth about this major economic contributor for Oklahoma. The truth my friend, is blowing in the wind.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah PC in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

PM attorney Jennifer Ivester Berry to discuss wind energy for ABA CLE course

Jennifer Ivester Berry is a member of the firm’s Transactional Practice Group as an Of Counsel attorney. She has a solid reputation in guiding real estate transactions with a focus on development, financing, and energy. Jennifer represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

Jennifer Ivester Berry has a solid reputation in guiding real estate transactions with a focus on development, financing and energy. Jennifer represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

Phillips Murrah attorney Jennifer Ivester Berry will be a panelist for a discussion about issues that arise in the wind development project process as a result of competing land uses. She will also present strategies for addressing such disputes, specifically competing interests of the oil and gas industry with renewable energy development.

The program, The World of Wind Development – Recent Land Use Cases and Issues, is a part of the American Bar Association’s Continuing Legal Education program.

Format: Webinar
Date: Wednesday, July 22, 2015
Time: 1:00 – 2:30 pm ET
Linkhttp://bit.ly/1f5j0JN

The panel will also include:

The panelists will discuss other land use issues in wind development projects and recent cases in the United States and Canada addressing challenges to wind energy development:

  • Zoning and permitting issues
  • Wildlife studies related to wind energy projects
  • Common land use provisions included in wind farm easements
  • Recent case law in Ontario dismissing claims that wind development would adversely impact public health
  •  Off-site wind development

Phillips Murrah attorneys quoted in OCC, OG&E story in The Oklahoman

Oklahoma Corporation Commission judge says no to replacing OG&E’s Mustang plant in $1.1 billion compliance case

By Paul Monies, Published: June 9, 2015 – Read the entire story here.

William Humes

Bill Humes represents individuals and both publicly-owned and private companies in matters involving energy and environmental issues, state and federal regulatory practice, public policy concerns, and government relations.

Oklahoma Gas and Electric Co. should be able to recover some costs related to environmental compliance, but should not get pre-approval to spend $400 million to replace its aging Mustang generating plant, an administrative law judge recommended Monday.

Corporation Commission Administrative Law Judge Ben Jackson said the utility also should explore adding wind energy, echoing a request by nearly all the parties in OG&E’s complex and lengthy case for environmental compliance and replacement generation.

In his 30-page report, Jackson recommended against any increase in rates at this time. But he said OG&E should be allowed to recover environmental costs already expended or under contract.

Jackson said other costs for environmental compliance should be decided in the utility’s next rate case, which is expected to be filed later this year.

Read the entire story here.
The last section of the story quotes Bill Humes and Jim Roth:

Reaction from intervening parties

Jim Roth copy

Jim Roth represents individuals and both publicly-owned and private companies in a range of business, energy and environmental issues, as well as a variety of public policy and regulatory matters.

Some of the parties involved in case were still studying the report Monday. Attorney Bill Humes, who represented The Wind Coalition, the Oklahoma Hospital Association and Oklahoma Cogeneration LLC, said at first glance the administrative law judge agreed with many of the recommendations of his clients.

“To disallow Mustang and to require more investigation into wind is exactly what our clients were looking for,” Humes said. “Everyone is sympathetic to OG&E’s need to comply with the EPA rules, but it has to be reasonable and the lowest cost. OGE’s plan was neither. It was a great plan for shareholders, but not for customers.”

Former Corporation Commissioner Jim Roth, who represented The Wind Coalition along with Humes, said he was glad the judge recommended additional wind power as a condition of the environmental compliance.

“It appears the judge’s recommendation takes to heart the unanimous request of all customer class parties that OG&E should be required to add low-cost, clean wind energy before any costs for extending their older coal plants should be considered.”

Will advances in offshore wind development result in onshore wind graveyards?

This article first appeared via Power Engineering on Nov. 14, 2013.


Jennifer Ivester Berry has a solid reputation in guiding real estate transactions with a focus on development, financing and energy. She represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

By Phillips Murrah Attorney Jennifer Ivester Berry

Just over a decade ago, the mention of a “wind farm” in western Oklahoma would have raised more than a few eyebrows. Today, a number of these “farms” have sprung up across open spaces where buffalo once roamed, and more are on the horizon. Similar scenarios have played out across the U.S. since the onset of the modern wind era beginning in the 1980s. Fueled by economic incentives and a growing desire for cheaper and cleaner energy, the U.S. is the leader in land-based wind energy capacity. However, more than 50 percent of the population of the U.S. lives in coastal areas, a reality that has been one of the primary catalysts for recent efforts by the U.S. Department of Energy to develop an offshore wind industry in the U.S. If these efforts are successful, will the land-based wind farms become a thing of the past?

Having stood mostly on the sidelines during the last decade, the U.S. is getting serious about adding wind to its energy portfolio. Renewables currently make up about 5 percent of the electricity generated in the U.S., with natural gas and coal leading in overall generation. While land-based wind farms will provide a good template, the offshore turbines will operate in a much different environment and be subject to elements not found on land. This will require modifications to the subsystems of the turbine, port upgrades, transmission planning and the maneuvering through an infant regulatory system. These challenges will likely result in higher costs and difficulty securing financing. However, once the mold is created, achieving economies of scale should be a matter of time.

Many of the land-based wind farms in the U.S. are located in the heart of the wind corridor of the central plains, but the wind resources available offshore are more abundant. The U.S. coastlines are extensive, and the wind blows stronger and more consistently offshore. Projections indicate that offshore generating capacity is four times what is currently coming on the U.S. grid, and many of the cities that require large amounts of electricity are located near coastal regions so transmission issues will be reduced considerably. Offshore development could inject billions of dollars in economic activity into the U.S. through professional manufacturing, construction and engineering jobs.

The offshore wind industry is still in the early stages of development, which makes the government’s goal of having 54 GW of offshore capacity by 2030 seem pretty lofty. Currently, there are about 20 offshore projects and approximately 2,000 MW in the planning and permitting stages. The Bureau of Ocean Energy Management, Regulation and Enforcement is overseeing developments in federal waters and has recently conducted two wind lease auctions – one off the coast of Massachusetts and Rhode Island and one off the coast of Virginia. Together, these lease areas are projected to produce enough power to provide electricity to more than one million homes. Lease auctions are expected in the near future for areas off the coasts of Maryland and New Jersey.

The turbines planned for these areas will not be operational for another five to 10 years, largely due to the permitting process, which will take between seven and 10 years. This delay is why some argue that development in state waters will take off at a much quicker pace, and it already has in some areas. While offshore developments within state nautical boundaries might progress at a faster pace, their close proximity to shoreline will limit their size and capacity, and the state and federal governments will have to collaborate if the U.S. is going to succeed in its renewable energy efforts via offshore wind energy.

Even with its paramount benefit of being green and clean, offshore wind development is not without its critics. Most objections stem from its high cost and the likelihood that much of the expertise needed to develop the essential technology would come from overseas. Additional objections focus on concern for the marine habitat, visual effects and noise pollution. Similar concerns existed when land-based wind projects were being developed, which gave way to certain diligence and mitigation requirements related to animal life that will certainly be applied in similar fashion to the offshore developments.

The development of offshore wind projects will no doubt be directly impacted by the advances, or lack thereof, of the coal and natural gas industries. When compared to these “established” forms of energy, wind can look much less attractive. Wind is inherently intermittent and lacks consistency in generation, partly due to the difficulty in efficiently storing the energy generated. However, development of offshore wind energy as an affordable and viable energy source will be necessary if the U.S. is going to expand and diversify its energy portfolio.