Sunday, April 21, 2013

How To Advance Wind Energy In The Midwest - Part 2

When I think about the wind “blowback” that’s occurring around the Midwest, it seems to me that it could be more of a judgment of federal and state policy decisions, than people railing against the wind technology itself.

Let’s start with the main incentive for wind, the federal production tax credit. This credit only offsets tax liability from passive investment income. Local farmers and residents have trouble utilizing this credit, MidAmerican energy and other utilities can utilize it. Lehman brothers  (no longer with us) and Goldman Sacs have made good use of the wind PTC.  Changing the wind PTC to allow offset of active income would be much fairer to farmers and Iowans. By the way, a number of fossil fuel tax credits allow the offset of active income. 

On the state level, the Iowa legislature made a specific law change in 2003 that allowed MidAmerican energy to build their wind assets in Iowa. It allowed MEC a guaranteed rate of return on wind generation. Federal law requires MEC to purchase wind energy from farmers and locals at the utilities “avoided cost”, a figure too low to finance wind energy. MEC skillfully steered legislation through the state capital that allowed them to build wind, but shut out farmers and independents who would like to do the same. It’s probably not a coincidence that MEC opposes any state legislation that attempts to remedy this and level the playing field for the states farmers, including this year’s SF372.  

This gives credibility to locals and the anti-wind crowd’s claims that wind energy is just “a rich guy’s tax subsidy”. They have to deal with and look at some big companies wind farm, but the profits go somewhere else. They also have to deal with developers intent on delivering the lowest cost project to a utility. Not necessarily a recipe for good treatment of local residents. I think it also makes locals more likely to buy into bogus claims by the established fossil fuels gang, that renewables aren’t cost effective. Eventually, it could cause them to vote against renewable supporting legislators. 

My point here is that we are getting exactly the type of wind energy that federal and state policy is telling companies to build, absentee owned wind projects that extract a lot of money out of Iowa’s rural areas.   Wind energy costs the same, no matter who the owners are. Will enough of the locals start telling legislators that they want to own wind farms? Wind energy is a fantastic, transformational technology. I just think we are doing average things with wind so far. 

I’m pretty confident that that as long as we have mostly absentee owned wind farms in the Midwest, opposition to them will continue to grow. I could put together a substantial post (and probably will) about the troubles I had with MidAmerican energy and their wind project here. If several of us here could have built our own wind project, it would have made it a lot easier to negotiate terms with MEC, like keeping more profits local, and building better terms into the utilities local lease agreements that would have avoided most of the problems we had at this wind project.  

That about covers my thoughts on how to gain more public support for wind energy in the Midwest.

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