Iowa Wind Industry Hopes It Can Recover With Tax Credit

Iowa Wind Industry Hopes It Can Recover With Tax Credit

Insiders are optimistic Congress will extend wind energy tax credits, but that doesn't mean Iowa's wind industry will see a quick fix.

The federal wind energy production tax credit is set to expire at the end of this year. Wind developers and renewable energy advocates are calling on Congress to extend the tax credit, warning that failure to do so will cost thousands of industry jobs. There are an estimated 6,000 people working in the wind industry in Iowa. However, if and when the tax credit is approved, it will take time to complete wind projects and some say it could be more than a year before the industry gets back on track.

WIND POWER: The wind energy production tax credit was created to try to level the playing field with coal-fired and nuclear electricity generation. If the wind incentive is allowed to lapse on December 31, wind energy would be the only form of energy generation without any federal incentive.

"I don't have a crystal ball but I'm hearing that the tax credit will likely get renewed and that it is a high priority," says Joe Baker, CEO of ACCIONA North America, a company that manufacturers wind turbines at West Branch in eastern Iowa. "It would be irresponsible of Congress to let this tax credit expire." The tax credit is worth 2.2 cents per kilowatt hour for wind power utilities.

Iowa has already lost hundreds of jobs, due to uncertainty of wind tax credit

Baker's company and other wind industry firms across the state have helped lift Iowa to its rank as the nation's second leading wind producer, trailing only Texas, a state almost five times bigger than Iowa. A U.S. Energy Department report from earlier this year showed about 20% of Iowa's electrical energy is generated by wind.

Stakeholders are hopeful the tax credit will be extended, possibly as part of a deal that could be struck to avoid the so-called "fiscal cliff." Even if advocates get their way and the tax incentive is renewed, the industry could continue to struggle. Iowa already has lost hundreds of wind energy jobs—cuts blamed on uncertainty over the wind tax break.

Iowa lawmakers and veterans urge extension of wind energy tax incentive

Iowa Senator Chuck Grassley last week joined another U.S. Senator, Mark Udall of Colorado, along with U.S. Representative Steve King of Iowa, Representative Jerry McNerney of California, and 40 veterans – many of whom have found post-military careers in the wind-energy industry – for a news conference to urge that an extension of the production tax credit for wind energy be included in year-end legislation to continue as many as 60 expiring tax provisions.~~~PAGE_BREAK_HERE~~~

Shannon Lehmkuhl of Estherville and Troy Ellis of Newton were among the veterans at the event on Capitol Hill. They were participating in an Operation Free two-day fly-in to meet with members of Congress. Click here for video of the news conference. Click here for photos of the news conference.

Grassley: production tax credit for wind is working and needs to be renewed

"The production tax credit for wind is working and should be part of the effort in Washington to help get more Americans – and more veterans – working," Grassley said. "Certainty about tax policy and affordable energy are factors for economic growth, and as much energy as possible – both traditional and renewable – should be produced at home to create jobs and strengthen economic and national security. There's no reason to worsen the unemployment problem by letting this successful incentive lapse."

In August, the Senate Finance Committee, with a bipartisan vote, passed an amendment authored by Grassley to extend the wind energy production tax credit.  Legislation in the House of Representatives to extend the production tax credit for wind has 118 cosponsors, both Democrats and Republicans.

Grassley authored the production tax credit for wind when it was first passed in 1992.  He has worked since then to extend the successful policy. Udall has been a vocal proponent for the wind production tax credit, speaking nearly every day the Senate has been in session to urge his colleagues to extend the production tax credit and secure made-in-America energy and the jobs it creates.

This is tax relief that rewards results, much different than failed tax-payer funded grants and loans

Grassley said the production tax credit for wind is available only when wind energy is produced. There's no benefit for simply placing the turbine in the ground. "It's tax relief that rewards results," Grassley said. "That's much different than failed taxpayer-funded grants and loans made since 2009."  The senator said wind energy detractors have blurred the distinction in efforts to undercut wind as a source of clean electricity.

The wind energy production tax credit was created to try to level the playing field with coal-fired and nuclear electricity generation. If the wind incentive is allowed to lapse on December 31, wind energy would be the only form of energy generation without any federal incentive.

Nationwide, wind-energy production supports 75,000 jobs. In Iowa, the wind energy industry employs nearly 5,000 full-time workers, with a number of major wind manufacturing facilities. Iowa generates 20% of its electricity needs from wind, and wind energy powers the equivalent of a million homes. Almost 3,000 utility-scale turbines in Iowa generate lease payments to landowners worth $12.5 million every year.

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