Wind industry aims for incentive extension

Mar 09 - Grand Forks Herald (ND)


A federal tax incentive that some see as critical to supporting the wind energy industry expired at the end of 2014, but some congressional lawmakers and advocates are pushing for its extension.

The production tax credit for wind provides 2.3 cents for every kilowatt-hour of energy produced. The credit has face uncertainty and expirations before, which industry officials said led to a slowdown and a loss of jobs.

Uncertainty over the credit's future was partly blamed for the loss of hundreds of jobs at Grand Forks' LM Wind Power plant, where the company makes wind turbine blades. The company itself doesn't receive the credit, but its customers do.

Dan Gordon , senior human resources manager for LM, said there hasn't yet been immediate effects of the expiration this year. He said the Grand Forks plant employs 600, which is up from 270 in 2012 after the company announced 345 employees would be laid off.

Although the PTC wasn't extended, it still applies to projects that began construction in 2014.

"We have a steady year in 2015," Gordon said, adding that LM supports the extension of the tax credit.

Congressional efforts

U.S. Sen. Heidi Heitkamp , D- N.D. , introduced an amendment to the bill to approve the Keystone XL pipeline that would have conveyed "the sense of the Senate " that the PTC should be extended. The amendment ultimately failed by four votes.

"Had we been able to get this through, it would have sent a signal to the market that there were enough votes to extend the production tax credit," she said in an interview with the Herald. "I'm trying to get the extension done, and (give) certainty to the wind energy industry."

The tax credit has expired several times since it was created in 1992, according to the American Wind Energy Association . The group said it has been extended mostly in short intervals.

"This unpredictability has made it difficult to make the industry fully cost-competitive," AWEA's website states.

Still, some say it's time to let the wind energy industry stand on its own without the tax incentive. U.S. Rep. Kevin Cramer , R- N.D. , previously argued that the wind energy industry "should have to work on its own, not with continued subsidy from the American taxpayer." Cramer wasn't available for an interview this week.

U.S. Sen. John Hoeven , R- N.D. , was one of 51 senators to vote against Heitkamp's amendment to his Keystone bill. When asked about the vote, Hoeven's chief of staff Ryan Bernstein said the amendment called for a flat five-year extension, rather than a gradual phase out of the credit.

"We've been talking to the wind industry and others and trying to find a path for a phaseout," Bernstein said.

Meanwhile, LM Wind Power is still in the middle of a remodeling project to accommodate the construction of larger turbine blades, which have become more common in recent years, according to a U.S. Department of Energy report.

"It will really prove to help our building here," Gordon said.

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