Gov. Kathleen Sebelius spent a day this week in Houston, the city of big oil, to promote another energy source – big wind.
In her speech Monday to the annual convention of the American Wind Energy Association, Sebelius called on the federal government to renew its production tax credit for wind energy due to expire at year’s end.
She urged Congress: “Make it clear to investors that this incentive will last for several years.”
The governor’s message echoes a concern of wind developers, who complain they can’t make plans to build in places such as Kansas without a multi-year tax credit in place to boost their emerging industry.
The U.S. Senate recently approved a single-year extension, but the bill remains pending in the House.
Some in Kansas’ congressional delegation say they support the credit, yet they haven’t succeeded this year in granting an extension beyond a year at a time.
“Transmission lines and wind farms take years to develop, and single-year credits send the wrong signal about our commitment to diversifying America’s long-term energy portfolio,” Sebelius said.
By year’s end, Kansas is expected to become the seventh state in the nation to install wind farms with a capacity of 1,000 megawatts of energy.
But after this year, and with strong demand for wind energy growing elsewhere in the world, some renewable advocates wonder whether momentum in Kansas can continue.
The U.S. wind energy industry took off this year like no other – installing 1,400 megawatts of new wind farms in the first quarter alone.
The American Wind Energy Association estimates the new generation’s value at $3 billion.
In Kansas, most notable are new turbines along Interstate 70 west of Salina. They’re part of the Smoky Hills Wind Farm, providing power to Hays-based Sunflower Electric Power Corp. and Midwest Energy as well as to the Kansas City Board of Public Utilities.
Another project, the Meridian Way Wind Farm south of Concordia, soon will be visible along U.S. Highway 81. When complete later this year, it will help power Westar Energy of Topeka and Empire Electric in southeast Kansas and southwest Missouri.
Several other Kansas projects are on the drawing board. They would join the two latest farms and three other wind facilities already operating in Butler, Ford and Gray counties.
Nationally, 17 new turbine manufacturing facilities also have popped up in just over a year, again highlighting the wind sector’s rapid expansion.
“America’s wind industry can deliver the goods in terms of clean energy and new clean technology jobs,” the association’s Executive Director Randall Swisher said.
“But if Congress does not act quickly, this momentum could be derailed at the worst possible time for the economy, placing 76,000 jobs and over $11.5 billion in investment at risk.”
Swisher noted that when the credit lapsed in previous years (1999, 2001 and 2003), development dropped off significantly, by up to 93 percent some years.
Sunflower Electric spokesman Steve Miller said they support the production tax credit, which benefits the wind farms where they purchase power.
The greatest value of wind for the utility’s customers is when it helps generate power to avoid the higher cost of natural gas, Miller said.
“Of all the utilities in Kansas, Sunflower and Midwest Energy have the largest percentage of their assets committed to wind energy production,” he added.
By year’s end, Sunflower will have 13 percent of its generation resources from wind. Midwest Energy will have 16 percent.
Asked for comment on the issue, a spokeswoman for Sen. Pat Roberts, R-Kan., said the lawmaker was a co-sponsor of Senate Bill 2821 to extend the credit – but just for a year.
First District Rep. Jerry Moran, R-Kan., agreed with Sebelius that renewable energy credits need to be extended for a longer term.
“That’s too short of a time frame. It makes it difficult for wind utilities to make plans when Congress is speaking one year at a time.”
Former Kansas Congressman Jim Slattery, a Democrat seeking Roberts’ seat in this year’s election, also said the nation needs a comprehensive energy plan with multi-year credits to stimulate investment in renewables.
“I believe strongly that both wind and solar are an essential part of that plan.”
Sen. Sam Brownback backs the credits but didn’t say whether they should be long-term incentives.
“These much-needed credits would provide a more stable investment environment for renewable energy that is so important to our state and nation,” he said. “I have met with individuals and groups from all over Kansas, and share their feelings that renewable energy such as wind and solar benefits our economy, our planet and our nation’s security.”
Moran said debate centers on the cost to the federal budget if credits are extended.
“It’s not that it’s not valuable from a public policy standpoint, but there’s a lack of agreement on how to pay for it.”
The congressman didn’t support earlier legislation to extend the renewable energy credits beyond a year, he said, because to pay for them, the bill would have to cut some credits for oil refineries, including some in Kansas.
“That reduces the likelihood that refineries will invest and expand here.”
Moran, however, notes renewable power is making inroads.
“There’s a lot of communities out west telling me they’re in the scope of wind companies,” he said. “Several economic development officials in counties in my district say that discussions with wind developers are ongoing.”
Elsewhere in Kansas, a Goodland wind turbine manufacturer is preparing to launch operations later this year in Hutchinson. Topeka leaders also have hinted at the possibility of a turbine plant in Shawnee County.
In the spring, an Independence service and repair business, Wind Energy Services, had a ribbon-cutting event with state and local officials.
“This is just the first of what we believe will be many companies connected to the wind industry,” said Sebelius’ spokeswoman Nicole Corcoran.
The governor’s speech in Houston last week and forthcoming federal carbon regulations signify Kansas still could catch up to the nation’s biggest wind power-producing states, led by the one once known purely for oil – Texas.
“The industry should read this as Gov. Sebelius is working hard to bring wind industry partners to Kansas,” Corcoran said, “from wind farm developers to turbine manufacturers to service/repair companies.”
By Sarah Kessinger
Harris News Service
8 June 2008
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