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Wind projects prompt fight in Congress over subsidies 

Credit:  Article by: KEVIN DIAZ , Star Tribune, www.startribune.com 18 December 2011 ~~

Foes of a Goodhue County project enlisted Rep.Kline for help in what one says is a David vs. Goliath effort.

WASHINGTON – When they bought a dairy farm near Red Wing 20 years ago, Ann and David Buck never thought the quiet life in rural Goodhue County could lead to a clash of wills with a faraway oil tycoon like T. Boone Pickens.

The Texas billionaire-turned-alternative-energy crusader sees wind in those hills. But the Bucks and many of their neighbors want no part of the Pickens-backed AWA Goodhue Wind project, which would put about 50 giant wind turbines near the scenic Mississippi River bluffs, an hour’s drive from the Twin Cities.

Fused together by political necessity, the Bucks have been joined by an improbable mélange of worried farmers, subsidy-averse Tea Party activists and environmentalists worried about the potential effect on bald and golden eagles that nest along the river gorge.

A looming court battle to block the $180 million project in southern Minnesota also is helping fuel a fight in Congress to pull the plug on the entire federal wind subsidy program created by President Obama’s 2009 stimulus package.

In less than three years, the program has helped re-energize the boom-and-bust wind industry with $7.6 billion in grants. That includes nearly $200 million in Minnesota, which now ranks fourth in installed wind power capacity.

An alliance of alternative energy industries, including wind, solar and biofuel interests, is fighting back, urging lawmakers in Washington to extend the program beyond its Dec. 31 end date, along with another set of renewable energy tax credits set to expire next year.

The uncertainty the industry faces in a budget-conscious Congress already has slowed a number of wind projects around the country and could threaten the Goodhue project, which has yet to break ground.

“We’re already seeing layoffs, and we’re already seeing effects in the supply chain,” said Ellen Carey, a spokeswoman for the American Wind Energy Association, the industry’s main advocacy group.

But in a local battle the Bucks describe as “David vs. Goliath,” the wind naysayers in Goodhue County have been boxed around a bit, losing several rounds before the Minnesota Public Utilities Commission, which has given the go-ahead for the project.

It’s one of a growing number of disputes over wind installations, the most famous being Cape Wind, a proposed offshore wind farm in the Nantucket Sound that has been fought by the Kennedy family.

“We’re hoping we’ll find that one stone that will knock it down,” Ann Buck said of the Goodhue project.

That stone has been provided by U.S. Rep. John Kline, a Minnesota Republican siding with the wind farm opponents in his district.

Kline, a veteran lawmaker with close ties to House Speaker John Boehner, is in the thick of the tax credit fight, pressing to end the so-called 1603 grant program that, if preserved, could provide the project more than $50 million in taxpayer subsidies.

“This is a wind energy project Goodhue County citizens don’t want, funded by taxpayer money the federal government doesn’t have,” Kline said.

‘Boatload’ of money

Although Pickens has morphed into a national spokesman for wind energy, officials from National Wind, the Minnesota-based company that manages the project, ignored repeated requests for comment.

A spokesman for Pickens, who is backing the project through his Texas-based Mesa Power, also declined to comment. “Talked to our team,” said the spokesman, Jay Rosser. “We’re going to pass.”

The project’s opponents are talking, however, and they’re not happy.

“If there wasn’t a boatload of federal money and a state mandate, they wouldn’t be here,” said Zumbrota-area horse farmer Kristi Rosenquist, citing a Minnesota renewable energy standard that requires utility companies to obtain 25 percent of their retail electricity sales from renewable sources by 2025.

Besides eagle kills, opponents worry about falling property values from noise, the possible effects of stray voltage on livestock and “shadow flicker,” the result of giant blades passing between nearby homes and the sun, which can resemble the effect of lights turning on and off.

“That’s probably one of the most annoying parts of this,” said Twin Cities attorney Daniel Schleck, who represents the Coalition for Sensible Siting, one of two citizens’ groups fighting the project.

National Wind’s proposed 78-megawatt wind farm has been in the planning stages for several years. But it got a big boost last year when Pickens, founder and chairman of BP Capital, joined the project with deep-pocket financing and a stash of surplus General Electric wind turbines from a downsized Texas wind farm.

‘It isn’t farming’

Like other utility-scale wind projects Pickens has financed, the AWA Goodhue Wind project could provide a huge tax shelter for its investors. Since 1992, the industry has relied on production tax credits that provide benefits from the generation of wind energy.

In some cases, the tax benefits can exceed investors’ entire tax liability, according to a recent study by the Congressional Research Service.

Following the financial crisis in 2008, with investment dollars drying up, Congress decided to juice the industry by offering up-front cash grants as an alternative to production tax credits.

That’s the “1603” program – named for a section of the 2009 stimulus package – that Kline has targeted. Although the Goodhue Wind investors could still revert to underlying production tax credits, those will disappear by the end of 2012 if Congress doesn’t renew them.

That short shelf life has deeply unsettled an industry heavily reliant on state and federal subsidies to fuel its growth. Historical data provided by the American Wind Energy Association show that when federal tax subsidies lapse, wind energy installations drop by as much as 93 percent.

That would be a welcome prospect for Ann Buck, who rejects the designation of the Goodhue project as a wind farm.

“I don’t call it a wind farm,” she said. “It isn’t farming.”

Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.

Source:  Article by: KEVIN DIAZ , Star Tribune, www.startribune.com 18 December 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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