Gale-force push for wind-power tax credit

The expiration of a tax credit for electricity generated by wind power would have minimal effect on Leitner-Poma, a Grand Junction company. Above, employee Justin Tinkle is shown in the paint department of Leitner-Poma, which is best known for manufacturing ski lift equipment.



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The expiration of a tax credit for electricity generated by wind power would have minimal effect on Leitner-Poma, a Grand Junction company. Above, employee Justin Tinkle is shown in the paint department of Leitner-Poma, which is best known for manufacturing ski lift equipment.

The push to extend a tax credit for electricity generated by wind power is gaining steam this week as industry representatives meet in Atlanta for an annual conference. Among the delegations will be representatives of Grand Junction-based Leitner-Poma of America, a company best known for manufacturing ski lift equipment but which also makes and installs wind turbines.

Whether that wind segment of their business grows or not could depend on whether or not the federal wind production tax credit is allowed to expire, as it is poised to do at the end of this year. Though it continues to enjoy bipartisan support, proponents fear election-year politics might doom the subsidy’s chances of making it through Congress this time around.

“We’re watching it very closely,” said Rick Spear, president of Leitner-Poma. “It could impact the amount of wind turbines that we build.”

But Spear also said the wind business is already slow right now due to investment being down throughout the economy, and that the end of the tax credit would hit larger producers such as General Electric or Brighton-based Vestas much harder than his company.

“We’re small players compared to them,” he explained, saying Leitner-Poma manufactured and installed turbines for one project last year and two in the past three years.

Overall, wind accounts for only about 5 percent of the work of the Grand Junction plant, which employs about 75 people, and while an expiration of the tax credit would not impact the number of employees at the plant, it could prevent an expansion of the wind segment of their work.

On a state- or nationwide scale, the story could be more dramatic.

“I don’t know how much (letting the tax credit expire) would decrease the amount of wind turbines built in the U.S., but it will be significant,” Spear said, venturing a guess of a 50 percent decrease.

Growth overseas

A study commissioned by the industry group American Wind Energy Association, or AWEA, found layoffs within the wind industry already had begun and that 10,000 jobs could be lost by the end of the year, since projects are typically developed over a year in advance and the possibility of the tax credit expiring is already creating uncertainty.

Overseas, the wind industry is continuing to grow, a point proponents of the U.S. subsidy are quick to point out.

Spear noted that one of Leitner-Poma’s parent companies, Italy-based Leitwind, has contracts for another 100 turbines next year, all outside the U.S.

“I am hopeful — given the president’s support and the need to stay competitive with other countries, like China — that Congress will act on the production tax credit before it expires. The wind production tax credit is critical to helping the United States stay on the cutting edge of developing clean, renewable energy technologies,” Sen. Mark Udall, a vocal proponent of extending the subsidy, said via email.

‘Red state’ support

President Barack Obama articulated his support last month while visiting a wind turbine blade manufacturer in Iowa.

Though presumptive Republican presidential candidate Mitt Romney has not taken a specific position on the tax credit, he has spoken out against subsidies for wind and solar projects on multiple occasions, a position that sets him apart from some in his party.

Twenty of the 101 co-sponsors of the bill to extend the tax credit are Republicans, including from “red states” Texas and Oklahoma.

The tax credit was created in 1992 and has not been allowed to expire since 2005.

It provides a 2.2-cents-per-kilowatt-hour income tax credit for producing power from utility-scale wind installations. Proponents also hope to extend a provision, included in the American Recovery and Reinvestment Act, that offers the option of a 30 percent tax credit for those who invest in wind projects, in place of the income tax credit.

These incentives effectively lower the cost of installing wind power, with the hope of encouraging investment and innovation until wind can be competitive without the help of subsidies.

Opponents say wind subsidies already have had enough time to work and that the industry should stand on its own.

AWEA credits the tax credit with leading to $15.5 billion a year on average in private investment in the U.S over the past five years and helping wind account for 35 percent of all energy capacity in the country added over that span, second only to that from natural gas.

Udall credits the policies with helping to bring Vestas and its nearly 6,000 jobs to Colorado.



COMMENTS

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Although I am all for wind power as an addition to the nations energy supply, it irritates me when the greenies demonize petroleum based energy development as harmful to the environment, and yet nothing is said about the bird and bat kills by windmills and there is no environmental impact studies being pushed as to possible weather pattern disruption by hundreds of thousands of windmills operating nationwide.

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