Gone with the wind (tax credit)

Aug 13 - McClatchy-Tribune Regional News - James Chilton Wyoming Tribune-Eagle, Cheyenne

The future of Wyoming's renewable energy sector hangs in the balance as Congress considers whether to extend a tax credit for wind energy production.

The Renewable Electricity Production Tax Credit for wind energy, first passed in 1992, is set to run out at the end of this year unless Congress acts to renew it.

But despite passing the Senate Finance Committee last week by a healthy bipartisan margin, it remains to be seen whether the extension will have similar success in the full Senate and in the House.

Complicating the issue is a statement made July 31 by Shawn McCoy, a spokesman for presumptive Republican presidential nominee Mitt Romney.

McCoy said Romney favors allowing the wind tax credit to expire. That, he said, would "create a level playing field on which all sources of energy can compete on their merits."

But if the tax credit n which provides 2.2 cents per kilowatt-hour produced n ends, it could have repercussions here in Wyoming. This is where a Denver-based company hopes to build the largest wind farm in the nation over the next few years.

Power Company of Wyoming, a subsidiary of the Anschutz Corporation, is working on plans for a 2,500-megawatt wind farm in Carbon County. It would be located on about 320,000 acres four miles south of Rawlins.

Last week the farm n the Chokecherry and Sierra Madre Wind Energy Project n was named by President Barack Obama as one of seven such projects nationally that should see their permitting and review processes fast-tracked. That would get them online as quickly as possible.

Currently, Power Company of Wyoming anticipates that the farm's final land use and right-of-way permits will be approved in late 2014. Then construction can begin.

But even if the project does pass all the regulatory hurdles, it will still take several more years before actual turbines start springing up, said Kara Choquette with Power Company.

First, she said, the project will have to install the necessary infrastructure to transport both the turbines and the electricity they will produce.

At an estimated cost of $4 billion to $6 billion, Choquette added that the project would provide untold economic benefits to both Carbon County and Wyoming.

But that could all be for naught if the federal wind tax credit isn't renewed, she said.

Once the permits are in place, whether the company goes through with the project will depend on a number of aspects, including the tax credit.

"This is one of those overall economic factors we'll have to look at," Choquette said. "We're looking to be on a level playing field with solar, and solar's federal tax credits are already extended through 2016."

Even the mere threat of the tax credit expiring has had an effect on the domestic wind energy industry.

According to Ellen Carey with the American Wind Energy Association, wind turbine manufacturers have already seen their orders for next year drying up due to uncertainty over the tax credit's future.

"A project must be slated, built and producing power by the end of this year in order to qualify for the tax credit," Carey said. "What's happening though, with that expiration looming, there's uncertainty for the developers to continue to construct projects and to place orders into the wind industry manufacturing sector."

With nearly 500 wind energy equipment manufacturers operating in 43 states, Carey said the expiration of the credit could spark layoffs of thousands of employees.

She said four major manufacturers announced layoffs this past week and added that the situation can only get worse over coming months.

"We could lose up to 37,000 jobs between what we've lost so far through the end of the first quarter of 2013," Carey said.

According to the American Wind Energy Association, wind accounts for 10.1 percent of Wyoming's overall annual energy production. That is the fifth-highest proportion among the 50 states.

But despite the potential benefits to Wyoming if the tax credit is extended, Gov. Matt Mead has taken a neutral position.

According to Mead's communications director Renny MacKay, the governor prefers to stay out of federal matters, given the tough decisions legislators are already considering.

But MacKay added that Mead believes Wyoming can still do more to refine its own tax structure to benefit both the wind and natural gas sectors to help encourage further growth in both.

"He thinks there could be a better balance between meeting the needs of local government and encouraging the development of more wind power projects," MacKay said.

"Gov. Mead does believe that wind power is a significant opportunity for Wyoming because of the economic impact it can have and also because there's an opportunity to marry the production of wind power to natural gas power production.

"Wind power is obviously intermittent, and gas power could make that into a stable source of energy."