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Officials believe tax credit made Iowa wind energy announcement possible

BY BRENT GRIFFITHS | MAY 10, 2013 5:00 AM

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U.S. Sen. Chuck Grassley, R-Iowa, is known by many as the father of the wind-energy production tax credit — the credit that many point to as one of the reasons for Wednesday’s historic announcement of a $1.9 billion wind energy project in Iowa.

“…We were meeting an economic need, an energy need, and need back in 1992 [when the credit went into effect]; it doesn’t seem so critical now, but God only made so much fossil fuels, so the more we can get out of renewables, the better,” Grassley told The Daily Iowan on Thursday.

Grassley welcomed the news of MidAmerican Energy’s $1.9 billion project, which could mean up to 656 turbines, potentially producing up to 1,050 megawatts of energy. In comparison 1,000 megawatts means roughly the energy output of 10 nuclear-power stations, said Andrew Kusiac, head of the University of Iowa Department of Mechanical and Industrial Engineering.

However, the nine-term senator wants to push for one last long-term renewal of the credit before he believes the industry will be mature enough to stand on its own.

“I would say long term would be about four years, which the wind industry feels it might be a mature industry by then,” Grassley said. “The political reality is four years is the best we can do. I like [the credit] and want the wind industry to mature … and when it matures, [the tax credit] shouldn’t be there anymore.”

U.S. Sen. Tom Harkin, D-Iowa, also expressed his support for the wind-energy production tax credit after Wednesday’s announcement.

“We have long known the benefit of the production tax credit for wind in states like Iowa — not just to increase our domestic energy supply but to create manufacturing jobs as well,” Harkin said in a statement.

President and CEO of MidAmerican William Ferhman said the renewal of the wind-energy production tax credit was one of the key reasons for the company’s unveiling of the project on Wednesday.

“Without that, the environment for doing projects of this magnitude and this size would not be possible,” he said during a video press conference on Wednesday.

Ferhman praised the work of Iowa’s Congressional delegation, which helped work to renew the credit as a small part of the so-called “fiscal-cliff bill,” passed Jan. 1 to address expiring tax incentives.

Abbey Bottenfield, a media-relations representative with MidAmerican — said the credit was “critical component” behind the decision to pursue projects and make them economical for both the company and customers.

Bottenfield said it is estimated the revenues from the productions credits, renewable energy credits, and the value of the energy will offset the cost of wind turbines and maintenance over a 30-year period.

Executive Director of Iowa Wind Energy Association Harold Prior welcomed the renewal of the credit but believed the delay in its renewal led to uncertainty in the industry.

“[Uncertainty] absolutely kills predictability of our industry,” he said. “When people are manufacturing major components of $3 million wind turbines, if they can’t have consistency … basically, they lay people off.”

Prior emphasized that the one-year renewal also brings about its own uncertainty, which is why many are pushing for a long-term solution. Even with his concerns he added the renewal was pivotal to MidAmerican’s announcement.

“This announcement wouldn’t have been made if Congress didn’t do this with the ‘end progress’ language,” he said.

One UI professor said Wednesday’s announcement would also drive more interest to the newly created College of Engineering wind energy certificate.

“More interest in wind will create more interest in the students and attract more people to the certificate,” said Pablo Carrica, an associate professor of engineering.


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