Wind power industry supporters say a federal tax credit that is driving Green Mountain Power to finish the Kingdom Community Wind project in Lowell by the end of 2012 could be extended.
A bi-partisan duo of lawmakers on the U.S. House Ways and Means Committee, which sets taxes, has introduced a bill to extend the American Renewable Energy Production Tax Credit to 2016.
Otherwise, the tax credit for wind power, which if available would mean millions of dollars in savings for Green Mountain Power and Vermont Electric Cooperative ratepayers, will sunset Dec. 31, 2012.
Tax credits for other renewable energy sources sunsets in 2013.
GMP has asked state regulators and even court judges to act quickly on issues relating to the Lowell wind project because GMP wants to have the construction complete and the 21 turbines generating electricity by the end of 2012.
If the project has extensive delays, GMP says its ratepayers would lose $47 million in the federal production tax credits.
GMP wind project manager Charles Pughe testified in Orleans Superior Court that delays in blasting caused last month by protesters – if continued – would create a five-week delay. That, he said, would push the end of construction into 2013 and cost ratepayers the loss of the tax credits to reduce the rate for the Lowell wind electricity.
A judge issued a preliminary injunction now in effect ordering protesters and anyone else near the wind project out of a 1,000-foot safety zone whenever blasting is under way.
Congress has routinely extended the tax credits since they were created in the Energy Policy Act of 1992, said Dan Riedinger, spokesman for the Edison Electric Association, a trade group of for-profit electricity utilities.
The trade association “can chart investment in renewables” based on the extension and pending sunset of the tax credits, Riedinger said.
Bill H.R.3307 by U.S. Reps. Dave Reichert, R-Wash., and Earl Blumenauer, D-Ore., proposes a four-year extension of the existing production tax credit for wind, biomass, geothermal, small irrigation, landfill gas, trash and hydro power, according to trade group North American Windpower.
Advocates note that historically, at least six to eight months before the tax credit expires, financial lenders hesitate in providing capital for projects because of the uncertainty created by the pending expiration of the credit, thus stalling projects from going online.
The rush to complete projects as the tax credit nears expiration also adds costs, resulting in higher electricity prices, the U.S. representatives said in a statement earlier this month.
Green Mountain Power has regularly asked Vermont’s congressional delegation to support extensions of the tax credits in the past, GMP spokeswoman Dorothy Schnure said.
American Wind Energy Association CEO Denise Bode supported the legislation in a recent statement, noting that it would benefit not only the wind industry, but also the nation’s work force and overall economy.
“The recent stability of the production tax credit has provided the foundation of wind energy’s transformation of a new manufacturing sector based on American ingenuity,” Bode said.
“Over the last six years, U.S. domestic production of wind turbine components has grown 12-fold to more than 400 facilities in 43 states. Extending the [production tax credit] will keep growing U.S. wind energy manufacturing jobs, rather than losing them to other countries,” she said.
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