February 26, 2012
Indiana, U.S.

Wind projects dependent on federal tax credits

By Ken de la Bastide, Tribune enterprise editor, Kokomo Tribune, kokomotribune.com 26 February 2012

When Congress failed to include a credit for wind energy development in the payroll tax cut bill, the ramifications could be felt around the country, including in central Indiana.

Wind energy proponents are hoping to get the tax credit extension added to another bill or considered as stand-alone legislation before the end of the year.

The credit provides an income tax credit of 2.2-cents per kilowatt-hour for the production of electricity from wind turbines.

Congressman Joe Donnelly said he thought it was a mistake not to extend the tax credits for wind energy producers.

“I support extending the wind energy tax credit because we need to harness the vast energy resources available to us right here in the U.S., creating jobs for Americans and lessening our dependence on oil imported from Middle East dictators,” Donnelly said in a statement.

Donnelly is a co-sponsor of a separate piece of legislation to extend the wind energy credit through 2019. The intent is to encourage more developments like the one currently in the works for Howard and surrounding counties.

E-on Climate and Renewables recently began construction work on phase one of the Wildcat Wind Farm in Tipton and Madison counties. The company eventually plans four phases to the project, which will also include Howard and Grant counties.

E-on intends to invest between $300 million and $400 million in Tipton and Madison counties during phase one and produce 200 megawatts of electricity, enough to provide electricity to 60,000 homes.

Construction of the project is expected to employ between 200 and 300 workers and the company will create up to 12 permanent jobs for maintenance work on the turbines, a company spokesman said.

“It won’t affect the current project,” Matt Tullis, a representative with E-on, said Friday regarding the tax credit situation. “The future phases could be impacted. We’re concerned about next year; there is a lead time to prepare for the project.”

Tullis said wind energy companies are hoping the tax credit extension will be approved as soon as possible.

“We’re very concerned about 2013,” he said. “If the extension is approved later this year, it will throw off any timetable for the future projects.”

In the past Congress has extended the tax credit for one or two years. Tullis said the company would like to see a longer extension of the tax credit approved.

Paul Bowman, vice president of development for E-on, told the Chicago Tribune the company has $1 billion in construction projects planned in 2013. However, those projects are dependent on the tax credit extension.

Bowman said a year’s delay would kill some of the planned projects, partly because leases on land and interconnection agreements with utility companies will expire.

“If we get the extension in the next couple of months, we’d be able to build some or all of those projects,” he said. “If it gets extended at the end of the year, it is too late.”