URBANA – Many residents throughout the country are waiting to see whether the U.S. economy reaches the “fiscal cliff” at the start of the New Year, but in Champaign County, some residents have another concern.
The federal wind Production Tax Credit, or PTC, is scheduled to expire today, and could have a significant impact on two phases of the Buckeye Wind Project in Champaign County.
If the PTC is allowed to expire, as many as 37,000 jobs in the wind industry could be at risk, said Peter Kelly, a spokesman for the American Wind Energy Association. The PTC provides an income tax credit of 2.2 cents per kilowatt hour for electricity produced from utility-scale wind turbines. Overall, the wind industry supports as many as 75,000 jobs, according to information from the AWEA.
Opponents of the tax credit argued it has outlived its usefulness and provides few benefits to the economy. Both advocates and opponents of the PTC lobbied members of Congress in the final days leading up to the deadline.
In Champaign County, the expiration of the PTC would also mean developers would have to re-evaluate the proposed Buckeye Wind Project, said Jason Dagger, project developer. The project would likely still move forward, Dagger said, but it might mean charging higher prices for the energy produced or seeking cheaper agreements for construction or turbine parts.
“We’re just going to have to see what happens and what it will mean to the Buckeye Wind Project,” Dagger said.
Members of the Ohio Power Siting Board are expected to decide as early as this spring whether the $250 million second phase of the Buckeye Wind project moves forward. A first phase of the project has already been approved, and combined, they would install more than 100 turbines throughout several townships in Champaign County. If everything goes according to schedule, both phases of the project could be under construction by the end of 2013, Dagger said.
The wind industry asked Congress to approve at least a one-year extension of the PTC, and eventually hopes for a longer extension that could be phased out by 2018, Kelly said. By then, the wind industry could potentially be competitive enough in the energy market to compete without the tax credit, Kelly said.
Only wind turbines that are up and running before the deadline expires will qualify for the PTC, so the Buckeye Wind Project would not receive the tax credit without an extension.
But extending the tax credit for even a year could cost taxpayers as much as $12 billion as projects under operation continue to receive the credit over the next 10 years, said Lisa Lonowes, executive director of the Industrial Wind Action Group, which counteracts what it describes as misleading information from the wind industry.
Proponents of the PTC argue it has minimal cost to taxpayers because of the manufacturing and construction jobs it creates, and because companies do not receive any benefit unless the turbines are producing energy. Every form of energy receives some form of incentive to remain competitive, Kelly said.
While the expiration of the PTC might affect some projects on the fringe of profitability, Linowes argued the majority would be able to be built by lowering other costs and possibly raising the price of the energy produced.
“I think the wind industry so far has not made a strong enough case for the PTC to be extended for one year, for six years, for any number of years,” Linowes said.
Locally, opponents of the Buckeye Wind Project have petitioned members of Congress to allow the PTC to expire. Julia Johnson, a member of Union Neighbors United, said more than 400 Ohio residents signed the petition, joining about 6,500 other residents in 25 states. Union Neighbors United is made up of local residents opposed to Buckeye Wind. Many of those who signed the petition statewide, Johnson said, are residents who lived in an area in which a wind farm has been proposed or has already been built.
Both sides of the debate said they were optimistic that members of Congress will decide in their favor.
An extension of the PTC has received support from both parties in the past, Kelly said.
“We believe we have the bipartisan support to extend it for projects that start next year, and then we’ll see,” Kelly said.
But with other concerns such as the fiscal cliff along with tax credits in other industries that are set to expire, Linowes believed an extension of the PTC was unlikely.
“It’s a little bit white knuckle there, but I do think it’s going to be very hard for them to get that passed,” she said.
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