4 windy states pull the rug out from under BigWind

It is time for BigWind to stand on its own 2 feet! Last week was a sad week for renewables. The four leading US wind states, Oklahoma, California, Texas and Iowa are all cutting back on subsidies for wind.  “The wind industry feels betrayed.” The Oklahoma Gov. wants to go a step further an impose a tax on wind while in Texas there is movement to get rid of 10 year PILOT payment/tax abatement programs. California’s issues concern land use because no one wants the turbines near them.  In Iowa, transmission needed to carry the power out of the state is facing regulatory hurdles.   The wind industry is doing their expected “woe is me” theatrics while “Industry opponents call such talk largely hot air, arguing that the federal $24/MWh production tax credit will enable developers to continue generating healthy profits for years to come as all projects under construction and many of those in their pipelines will have qualified for it. They contend that Oklahoma will continue to lure investment because of its world-class wind resource and lower corporate tax burden compared with many states.  The windies are blaming the oil and gas industry lobbyists for their “problems’. Will Ohio politicians pay attention to these realities and PROTECT our citizens from these problems? Don’t expect Ohio Senator Hite to care about these truths.  He supports BigWind, irregardless of the facts. Wave some cash in his district and he goes blind to the truth.  If you reside near him, would you please educate?…

A stinging political setback in Oklahoma and problems brewing elsewhere could short-circuit future wind industry growth, writes Richard A Kessler in Fort Worth…

10 May 2017

Back in November, the US wind sector could never have imagined that four of its leading wind states would be a greater source of industry uncertainty than President Donald Trump.

Events in Oklahoma have raised concerns over states’ readiness to continue subsidy support in an era of budget cutbacks and fiscal constraints, while potential trouble is also brewing in California, Iowa and Texas, suggesting that the industry’s ability to lobby effectively on crucial issues will soon be put to the test.

In March and April, by an overwhelming margin, Oklahoma’s Republican-dominated Senate and House voted to roll back the remaining state tax incentive for wind energy to 1 July, breaking an earlier pledge to preserve it until the end of 2020. It was signed into law by Republican Governor Mary Fallin on 17 April.

The wind industry feels betrayed. “Changing the investment rules in the middle of the game sends a message to every investor in America that Oklahoma can’t be expected to honor its economic development commitments,” says Jeff Clark, executive director of regional advocacy group The Wind Coalition.

Facing large budget shortfalls, Republican Governor Mary Fallin is in no mood to debate the issue, saying the sector was “incentivized sufficiently to now be a major player in the Oklahoma energy industry”. She also wants to also slap a $5/MWh tax on wind energy production — five times what Wyoming collects, the only other state to do so….

In neighbouring Texas, the leading wind state, the industry is under attack from lawmakers who want to limit or prohibit counties and school districts from using a popular ten-year property tax abatement scheme known as Chapter 313 to attract new wind projects…

Meanwhile, in California, zoning boards and other regulatory bodies are, for various reasons, restricting land use so much that wind activity has slowed to a crawl.  The number-four wind state did not install a single megawatt in 2016 and had only 131MW under construction this year.

Analysts warn that if this trend continues, California could have to import 80% of the estimated 10GW of new wind capacity it may need to meet a 50% renewables mandate by 2030.

And in Iowa, the second-ranking wind state, merchant transmission developer Clean Line Energy Partners is struggling to obtain necessary regulatory approvals for its $2bn Rock Island project that it says would lead to $7bn in new wind farm investments…

Without it, the industry will not be able to continue all its planned massive wind expansion there, as future supply will exceed domestic needs. Iowa already generates more of its electricity from wind power — 36.6% in 2016 — than any state.

Lessons from Oklahoma

Oklahoma’s early sunset of the $5/MWh Zero-Emissions Facilities Tax Credit is particularly troubling for the wind industry, as it represented a high-profile political setback in one of its fastest-growing markets. The move will also be financially painful for developers.

“This is the type of thing the industry doesn’t want to have happen. It sets a precedent and empowers other states to pursue similar legislation,” says Luke Lewandowski, research manager at MAKE Consulting…

The independent, non-partisan think tank estimates this would be an increase from an estimated $460.5m year earlier — a huge chunk of lost revenue considering the entire state budget is less than $7bn. By comparison, latest official data shows wind energy producers claimed $59.7m in zero-emission credits and $29.6m in for an exemption on local property taxes in the 2016-17 financial year. Wind investment in Oklahoma over the last decade exceeds $12bn…

Oklahoma wind developers currently use the zero-emission incentive to reduce their tax liability during the initial decade a wind farm generates power. Unused credits are also refundable in cash for 85% of face value. So developers stand to lose millions of dollars if they cannot bring under-construction projects into operation by 1 July…

Industry opponents call such talk largely hot air, arguing that the federal $24/MWh production tax credit will enable developers to continue generating healthy profits for years to come as all projects under construction and many of those in their pipelines will have qualified for it. They contend that Oklahoma will continue to lure investment because of its world-class wind resource and lower corporate tax burden compared with many states.

Byron Schlomach, director of the 1889 Institute, a public policy group in the state capital that favours limited government, disputes the notion that Oklahoma is turning against the wind industry or engaging in discrimination. He says the industry no longer needs incentives as the state did what it could to help it grow. Oklahoma also met its voluntary 15% renewables mandate by 2015.

“I think everybody feels like we’ve done our part,” he says. “We’ve done enough for them at this point and they need to stand on their own two feet.”…

 

 

Source: The coming threat from US wind states | Recharge

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