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Wind industry awaits jolt to renew growth

Washington, D.C. – The wind-power industry is looking for another jolt out of the government to keep growing.

For now, the focus is on persuading the lame-duck Congress to extend a subsidy that was created by the 2009 stimulus bill and is set to expire Dec. 31.

Beyond that, the industry is looking to the next Congress to pass a mandate for renewable electricity, which developers say would guarantee a growing market for wind power and encourage investment in manufacturing turbines, as well as building wind farms.

Mandates will be a tough sell with Republicans, who are taking control of the House and cutting the Democrats’ majority in the Senate. But one idea seen as a possible compromise is a broader “clean energy” or “diverse energy” mandate that could include nuclear energy, advanced coal technology and possibly even some incentives for natural gas.

Although energy policy is unlikely to be a priority for the Republicans, a power mandate that goes beyond wind and solar could appeal to Republicans because it’s more of an “all-of-the-above” approach to energy development, said Jonathan Weisgall, a lobbyist for MidAmerican Energy Holdings.

Sen. Richard Lugar, R-Ind., proposed a “diverse energy” mandate this year that would require utilities to get 20 percent of their power from lower carbon sources, including nuclear and hydropower, by 2020 and 30 percent by 2030.

Wind energy already accounts for about 20 percent of Iowa’s electricity production, according to the Iowa Policy Project, a research organization.

Lugar’s bill was to be an alternative to the cap-and-trade climate bill that passed the House in 2009 but stalled in the Senate. The climate bill included a renewable electricity mandate that the wind industry wanted, but the legislation is now dead, and President Barack Obama has said that it isn’t coming back.

Environmentalists want to restrict any mandate to wind, solar and other renewable power sources.

However, mandates such as Lugar’s may still appeal to environmental groups because they are high enough to guarantee increases in renewable power usage, said Marchant Wentworth, who follows energy policy for the Union of Concerned Scientists.

“Some of these diverse electricity standard proposals are arguably getting you more renewables” than the renewable power mandate that the Senate had been considering, he said.

But any kind of power mandate will be difficult for many Republicans to support because “it can still be seen as more government intrusion,” Weisgall said.

Underscoring that point, a leading candidate for the chairmanship of the House Energy and Commerce Committee, Fred Upton, R-Mich., used an article Friday in the Daily Caller, an online site, to slam the idea of a renewable power mandate, which he said would hurt the economy by raising electric rates. “We must not enact policies that inflict pain on American ratepayers in the form of higher monthly utility bills,” he wrote.

A power mandate would likely have to include provisions that would allow utilities that can’t meet the targets to buy credits from utilities that exceed them, said a specialist in energy policy at the American Enterprise Institute, a pro-business firm.

It was that same sort of cost shifting that helped doom the cap-and-trade climate bill, which would set limits on greenhouse gas emissions. Utilities and other companies with excessive emissions would have been required to reduce them or buy credits.

Officials with the American Wind Energy Association have expressed concern that power mandates that allow for more than renewable electricity, including incentives for shifting from coal to natural gas, could crowd out wind energy.

A spokeswoman for the organization declined to comment on prospects in the next Congress, saying the industry was focused on its priorities in this congressional session, which include an extension of the grant program that was credited with a surge in wind projects.

The group is working to get an extension of the program included in a bill that would continue the tax cuts passed under former President George W. Bush.