With the election over, wind industry insiders are turning to Congress to see if an extension of a crucial tax credit could be passed in a lame-duck session.
The federal wind production tax credit will expire Dec. 31 without congressional action. The incentive provides a tax credit of 2.2 cents per kilowatt hour for electricity produced from wind.
Oklahoma has seen rapid growth in recent years to its wind-generation capacity, with much of the increase attributed to the tax credit. The state is on track to have nearly 3,000 megawatts of capacity installed by year's end. That's a 173 percent increase since 2009.
“This year is obviously going to be a banner year with all the installations we have,” said Kylah McNabb, wind development specialist with the state Commerce Department.
McNabb said Oklahoma is on track to meet its 15 percent goal for renewable energy by the end of the year. That's two years earlier than planned.
Construction continues on two large wind farms in the state: the 300-megawatt Canadian Hills wind farm west of Oklahoma City and the 235-megawatt Chisholm View project near Enid. Acciona North America started operations this year at its 132-megawatt Big Smile Wind Farm in Beckham and Roger Mills counties.
One megawatt can power about 250 homes.
A one-year extension of the wind production tax credit was included in a bill that won bipartisan passage in a Senate committee in August. But its status in the GOP-controlled House has been unclear. A possible compromise could include an extension with a specified time period to phase it out completely.
With Congress dealing with the so-called “fiscal cliff” on federal spending and tax cuts, the wind production tax credit might get lost. That's why detractors and backers of the credit continue to press their case before Congress.
“I think everyone at this time is just having faith that the national tax situation will get figured out and that some sort of production tax credit will be renewed,” McNabb said. “Whether or not it has a phaseout provision, nobody really knows. There's just so much going on and so much to deal with that wind and the wind tax credits are one more element left to be decided on.”
The bipartisan Governors Wind Energy Coalition sent a letter to congressional leaders Tuesday again urging an extension. The coalition includes Oklahoma Gov. Mary Fallin, but the letter came from its leaders, Iowa Gov. Terry Branstad and Oregon Gov. John Kitzhaber.
“The United States has some of the best wind resources in the world, but the lack of policy stability hinders the nation's ability to develop them fully,” the letter stated. “Please support our states in the pursuit of economic strength, energy diversity and consumer savings by acting quickly to extend the (production tax credit).”
The American Energy Alliance, which wants to let the credit expire, says the wind energy industry has reached maturity and no longer needs a government handout. The alliance says state renewable energy standards and goals, not the tax credit, have driven much recent expansion in wind production.
The production tax credit for wind energy has been around since 1992, but it's never been permanent. Congress let the credit expire three times in the past 20 years before renewing and extending it.
McNabb said new interstate transmission lines are a key part of the next step for Oklahoma's wind industry. Planned transmission projects include Clean Line Energy Partners' Plains and Eastern line, which would take electricity from wind farms in the Panhandle to Tennessee using high-voltage, direct-current lines.
“What that will allow is the export to other states,” McNabb said. “We're essentially meeting the needs in the state. Now it's a matter of the infrastructure catching up.”