Thursday, March 26, 2015

Plan to Expand Regional Support for Wind Power Takes Shape in the Midwest

To be sure, Tom Kiernan, CEO of the American Wind Energy Association (AWEA), and Bob Inglis, the former Southern Republican congressman and free-market enthusiast, are not political soul mates.  So when they got together in the Twin Cities last week for a discussion about the future of U.S. energy, their banter at times showed they were two distinct political species.
While wind power is experiencing solid growth in parts of the Midwest and Great Plains, its prospects for growing outside core states like Texas, Iowa, Illinois and Minnesota are less certain.

That's because many of Inglis' fellow Republicans have soured on the idea of extending a key tax incentive that has been a primary driver of wind energy's phenomenal rise from a niche technology 25 years ago to a mainstream energy source today, with more than 65,000 megawatts being delivered to the grid.

Former Rep. Bob Inglis proposes cutting all energy tax breaks from the tax code. Photo courtesy of the Energy and Enterprise Initiative. (Credit: Click to Enlarge.
The tax break paid wind energy developers 2.3 cents for every kilowatt-hour of power produced by a wind farm for the first 10 years of operation.  AWEA has credited it with spurring more than $15 billion in annual investment over the last five years, but it expires Dec. 31.

Kiernan worries that would set the industry up for another crash landing, much like what occurred in 2013 after Congress allowed the PTC to sputter into the final days of 2012, before giving it a last-hour reprieve in early 2013.

New wind farm completions fell from a record 13,082 MW of capacity in 2012 to just over 1,100 MW in 2013, the steepest drop in the industry's history.  Last year, with the tax credit back in place, an additional 12,700 MW entered the development pipeline.

Tom Kiernan, CEO of the American Wind Energy Association, seeks new federal support for wind power production. (Credit: Wind on the Wires) Click to Enlarge.
Kiernan wants to avoid further uncertainty, hoping to lure enough moderate Republicans to support another multi-year extension of the production tax credit for wind power.

Inglis sees an alternate path, one he believes will draw in conservatives and even libertarians on Capitol Hill.

Rather than pursue another divisive round of tax incentives for various energy sectors, why not strip the tax code of all its energy-related tax breaks, he said, including those that subsidize the cost of oil and gas exploration or that support low-cost coal and mineral leases on federal lands.

"We want to break through this mental logjam, which is about the government favoring one energy fuel over another," Inglis said.  "We get a lot of buy in for that proposition with fellow conservatives who understand that we're singing the song of our tribe, that there shouldn't be any subsidies for any fuels, period."

Read more at Plan to Expand Regional Support for Wind Power Takes Shape in the Midwest

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