Congress renews wind production tax credit

by Paul Monies Published: January 3, 2013
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Developers in the wind industry got some good news for the new year as Congress extended a key tax credit for electricity generated by wind.

A bill to deal with the so-called “fiscal cliff” also included a one-year extension of the wind production tax credit until Dec. 31. The incentive gives producers a 2.2 cent per kilowatt hour tax credit.

The Senate passed the bill early Tuesday, while the House passed it Tuesday night. One member of Oklahoma's congressional delegation, Rep. James Lankford, R-Oklahoma City, voted against the bill. President Barack Obama was expected to sign the measure but didn't say when.

Uncertainty over the future of the tax credit stalled new wind developments in the second half of 2012. Meanwhile, developers scrambled to put existing projects into service before the end of the year to qualify for the credit. Among those making the deadline were the Chisholm View project near Enid, the Canadian Hills development west of Oklahoma City and Oklahoma State University's Cowboy wind farm near Blackwell.

State capacity grows

Oklahoma now has more than 2,900 megawatts of wind-generating capacity across the state, said Kylah McNabb, wind development specialist with the state Commerce Department. That's up from 1,500 megawatts in 2010. One megawatt can power about 250 homes.

The one-year extension of the tax credit will be helpful for stalled projects, McNabb said. It also changes the timing of the tax credit. Projects now just have to be under construction by the end of year.

The older credit required wind turbines to be generating electricity by the deadline.

“I think I would still expect a conservative approach to development this year,” McNabb said. “I think the change in the language allowing construction to start in 2013 offers a wealth of opportunity. I think you will see more projects go online than with the traditional wording of the tax credit.”

McNabb said because of the tax credit's uncertainty in 2012, the supply chain for components might take some time to replenish. The one-year extension, while helpful, may not bring back some manufacturing jobs that were lost as the developments were put on hold.

“As far as future development, I still think that's unknown as far as new projects coming on and being acquired,” McNabb said.

“I think you're going to see projects that are advanced and mature in the project development pipeline have a much greater chance of moving forward and being brought online this year.”

Steve Wolfgram, vice president of Competitive Power Ventures Inc., said many in the wind industry were hoping to see some long-term certainty. His company developed the OU Spirit Wind Farm, now owned by OG&E, and the Keenan II wind farm near Woodward.

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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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