Nestled amidst an ocean of corn and soybean fields, a Midwestern utility recently unveiled the latest wind energy expansion in ruralAmerica. MidAmerican Energy originally announced its “Rolling Hills” wind project in December 2010 but begun placing the final construction pieces in place throughout the summer of 2011. According to company officials, local residents have welcomed the wind energy development with positive reviews.
Tom Budler: “Normally we’ve had a great response with the local communities. When we look at this area the sign on the town coming in is ‘home of friendly people.’ All of our easements are on a voluntary basis so people may choose not to participate but the majority of the folks have joined.”
The entire “Rolling Hills” project will pool the power resources of 258 wind turbines creating enough energy for 190,000 homes. The latest venture for MidAmerican makes the utility number one in the U.S. for wind-powered electric generation among rate-regulated utilities. But much of this construction would not be possible without favorable energy tax credits in Washington.
Tom Budler: “The production tax credit is a key economic component for us building and moving forward with these project. Over the life of the project it represents really one-third of the project revenues that are generated. It’s a very significant portion of the economic benefit that our customers are able to see at this point.”
The wind energy production tax credit is scheduled to expire at the end of 2011. MidAmerican officials say these tax credits are vital for future development.
Tom Budler: “Its likely we would not move forward with these projects if the production tax credit was not renewed in the future.”
Furthermore, members of the Governors’ Wind Energy Coalition addressed a letter to the White House in August, pleading for long-term tax credit extension. The members wrote:
"Wind-related manufacturing will slow if the credits are not extended, and some of the tax credits' benefit will be lost if Congress pursues a last-minute extension… Extending the production tax credit and the investment tax credit, without a gap, is critical to the health of wind manufacturing in our nation. The wind manufacturing industry in the U.S. would benefit even greater if the extension of these credits would be for at least seven years."
But President Obama alone will not decide the future of wind energy tax policy.
It’s unclear whether the energy credits will find legislative momentum in the weeks ahead and the fiscal climate could not be bleaker. A “super” committee of legislators must trim $1.5 trillion in spending by late December. The committee will likely pinpoint potential savings from hundreds of federal programs and focus heavily on tax policy overhauls.