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Wind energy development faces sharp drop without federal tax credit

A tax credit for wind is set to expire at the end of the year, leading to industry fears of another boom-and-bust cycle of wind energy development.
by Paul Monies Published: March 23, 2012
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In his visit to the state this week, President Barack Obama took note of Oklahoma's wind industry as an important part of the nation's portfolio of renewable energy.

“It means more wind power — which, by the way, nearly tripled here in Oklahoma over the past three years in part because of some of our policies,” Obama said Thursday at a Cushing-area pipe yard.

Jaime McAlpine, president of Edmond-based Chermac Energy Corp., said his company has about 1,500 megawatts of wind power under development in Oklahoma through 2014.

Extension of the tax credit is critical to maintain the industry's momentum, he said.

“Every day that passes without an extension is a nail in the coffin for the potential of another renewable energy source,” McAlpine said.

Critics of the tax credit say the wind power industry should be strong enough to exist without government support. McAlpine said the large, up-front capital costs for construction, equipment, leases and machinery for wind power means it's hard to find financing without the credit.

“We don't receive it until we're actually producing energy for consumers,” he said. “This credit leads to increased manufacturing and adds to energy independence. Will there be a need for it forever? I don't think so, but we need it for the short term. All energy sources have some type of incentive or credit because energy is the lifeblood of the United States.”

Meanwhile, Oklahoma Gov. Mary Fallin sent a letter to Congress last month in support of the tax credit extension.

Fallin said the wind energy sector is an “American success story.”

“As a country, we have decided to support energy diversity and development of all domestic resources, creating an ‘all of the above' energy strategy,” Fallin wrote. “The (production tax credit) plays an important role in helping to deploy technologies that ensure a diverse, domestic energy fleet.”

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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