Northwest wind developers are once again grappling with uncertainty as the federal tax credit for renewable energy production is set to expire Tuesday.
It’s a familiar challenge for the industry. The credit, which pays 2.3 cents per kilowatt-hour of electricity generated by wind, nearly expired a year ago until it was extended by Congress as part of a deal to avoid the dreaded “fiscal cliff.”
Advocacy groups are now lobbying to keep the incentives intact, but opponents argue federal wind subsidies are inequitable and unfairly burden taxpayers across the country.
Amy Baird, spokeswoman for the Renewable Northwest Project in Portland, said there is plenty of potential for wind farms in the region if they can have stable, long-term federal policy. Oregon has already invested more than $9 billion in renewable energy over the last decade, according to the organization.
Allowing the production tax credit to expire only discourages that positive growth, Baird said. “Having stable, long-term policy creates a safe business environment,” she said. “We hope it continues to be part of our policy in the state.”
In years past, only finished projects could qualify for the credit. When lawmakers extended the program in 2012, they allowed projects to qualify so long as developers had either started construction or invested 5 percent of its cost before the end of the year.
A database provided by the Renewable Northwest Project shows no projects under construction in Oregon, though 11 have been approved and nine more are in the permitting process.
A project being developed in Morrow and Umatilla counties is a 500-megawatt facility proposed by Wheatridge Wind Energy and Swaggart Energy Transmission in Ione. It could start generating electricity by the end of 2016 if approved by the Oregon Energy Facility Siting Council.
That’s too late to qualify for a tax credit as it stands now, said Sam Enfield, a Seattle-based manager working with the group.
Enfield began his career in wind development in 1992, the year the production tax credit was first created. He said there’s still recognition of its importance not only for developers, but also consumers.
“The production tax credit basically flows through to the price,” Enfield said. “I believe the technology has improved so much, and costs have come down so far, wind energy is really becoming mainstream. We’ve seen enough validation over the years to keep making this investment.”
Critics, however, believe it is time for the wind industry to start standing on its own. A recent study by the American Energy Alliance, a free-market advocacy organization in partnership with the Institute for Energy Research in Washington, D.C., calculated that 30 states and the District of Columbia all lost money on the credit in 2012.
Spokesman Chris Warren said wind developers in Oregon actually saw a net gain, with more than $99 million brought in. But with the industry no longer in its infancy, it shouldn’t continue to be propped up by the taxpayers, he said.
“The production tax credit has been around for two decades now,” Warren said. “Our hope is no one in Washington, D.C., will resurrect it again. It’s happened too many times.”
The environmental benefits of wind energy are substantial, according to another study led by Environment Oregon. It shows the state ranked eighth in production last year, keeping more than 3.6 million metric tons of carbon pollution from the atmosphere — or the equivalent of taking 764,407 cars off the road.
State Director Sarah Higginbotham said Environment Oregon is urging the congressional delegation to make extending the credit its first priority in 2014.
“Oregon wants clean power, and renewable energy on the ground,” she said. “It’s providing very big environmental benefits in the state, and we don’t want to leave those things on the table.”