Last week, Iowa Governor Chet Culver, along with 11 other Midwest governors, sent a letter to Congressional leaders in Washington, D.C., asking that Congress extend the wind production tax credit or PTC for up to eight years. The move would bring stability to the Midwest's growing wind energy industry.
"With nearly 1,000 wind turbines capable of powering nearly 250,000 homes, Iowa has become a national leader in the wind energy industry, bringing new jobs and opportunities to Iowa," said Culver. "We must ensure this industry's continued growth, and this is why I call on congress to support the Production Tax Credit. This measure is vital to this industry's future and will help make Iowa the wind energy capital of the country."
Iowa currently ranks third in wind energy production, with more than 1,000 wind turbines capable of producing nearly 1,000 MW of electricity annually. In addition to the TPI company, Iowa is home to some of the biggest names in wind energy production equipment manufacturing, including Acciona Energia in West Branch, Clipper Wind Power in Cedar Rapids and Siemens Wind in Fort Madison.
Midwest governors ask Congress for extension
Culver has challenged Iowans to produce more wind energy, setting the goal of producing 2015 megawatts of electricity from wind by 2015. Studies project Iowa is poised to surpass this goal, showing Iowa will produce over 2,000 megawatts by 2011. Here is the letter signed by Culver and 11 other Midwest governors:
Dear Congressional Leadership:
As Governors of states where the wind industry has had a tremendous impact on our economies, we know that uncertainty of the future of the wind Production Tax Credit (PTC) must be avoided if this burgeoning industry is to thrive in the years ahead. Accordingly, we respectfully ask that Congress act to extend the PTC prior to its expiration in December of 2008, and that the PTC be extended for up to eight years. A longer extension will bring needed stability to the wind industry and spur more wind development at lower overall costs than would otherwise be possible with repeated short-term extensions.
Energy security, energy independence, dependable energy pricing, and positive climate change impact are all compelling reasons why wind energy deserves to be a national priority and receive national support. Transforming the economies of our states is an even more compelling reason. An April 2007 study, "Projections of Wind Generation in the Upper Midwest" states that 11,829 Mega Watts (MW) of wind energy generation worth $22.5 billion will be built in a 12-state region in the next seven years, 2007 to 2013.
This $22.5 billion capital investment will have an especially dramatic impact on the rural areas of the Upper Midwest states and also on each statewide economy. Using calculations from the American Wind Energy Association (AWEA) this capital investment will generate:
- $59 million in lease payments to farmers and ranchers
- $148 million in property taxes, the majority of which will go to rural school districts
- 10,200 jobs (1,690 construction, 950 operations and maintenance, 5,000 direct manufacturing and 2,500 indirect manufacturing)
All of these calculations depend upon the continuation of the PTC. History demonstrates that eliminating federal support will cripple efforts to expand the U.S. wind industry and endanger our ability to promote energy independence and create high-quality American jobs. Three times this decade the national PTC has been allowed to expire: 2000, 2002 and 2004. In each of those years, wind energy installation plummeted by an average of 85% compared to the previous year when the PTC was in place.
Given the historical market reaction to the PTC expiring, it would be logical to project an 85% reduction from the "Projections of Wind Generation in the Upper Midwest" calculation. This would mean:
- Development of only 1,833 MW worth $3.5 billion installed over the next seven years instead of 11,829 MW worth $22.5 billion, producing a net loss of 9,996 MW and $19 billion in investment
- Only $9.2 million in lease payments instead of $59 million, producing a net loss of $49.8 million
- Only $23 million in property tax payments instead of $148 million, producing a net loss of $125 million
- Only 1,600 jobs created instead of 10,200, producing a net loss of 8,600 jobs
Our states are experiencing the growth of the wind energy industry. Wind farms are going up in record numbers. A turbine manufacture from India has established a blade manufacturing plant in Minnesota. A Texas tower manufacturer has established a plant in Illinois. A California blade maker has established a facility in South Dakota. Wind energy companies from Denmark, Spain and California have established manufacturing in Iowa. All of this has happened in the last three years.
Now is the time to nurture this industry and find creative ways to support it. Thank you for your consideration of this request. We look forward to working with you on this, and other issues impacting our nation in the future.