Proposed Stearns County wind farms nab tax credit renewal 

A move by Congress to extend a tax credit for wind energy production as part of the “fiscal cliff” deal was good news for three proposed Stearns County wind farms.

The 20-year-old production tax credit, which provides wind farms with an income tax credit of 2.2 cents for every kilowatt hour of electricity they produce, expired Dec. 31. As part of the bill passed on New Year’s Day, federal lawmakers extended the credit for any wind project that begins construction in 2013.

Supporters argued the tax credit has helped level the playing field and allowed the U.S. wind industry to compete with energy from fossil fuels. Allowing the credit to end would have cost the industry about 37,000 jobs, according to the American Wind Energy Association.

Joshua Low, organizing representative with the Sierra Club’s Beyond Coal to Clean Energy Campaign, called the tax credit renewal “a major victory for Minnesota’s clean energy economy.”

“It’s going to put thousands of Americans back to work, and it’s going to guarantee that the wind energy industry continue to provide clean energy jobs” in the Upper Midwest, Low said.

Last year, the wind industry saw a significant slowdown as the uncertainty of the tax credit stalled many projects. Several manufacturers of wind components laid off workers.

The tax credit extension should start to reverse that trend, said Kelley Welf, spokeswoman for Wind on the Wires, a regional coalition of wind energy advocates based in St. Paul.

“We really do see it helping to kind of restart business development again,” she said.

Wind projects need only to start construction by the end of 2013 to qualify for the tax credit, Welf noted. She said that was a recognition by Congress that wind projects can take 18-24 months to develop.

Geronimo Wind Energy, based in Edina, is proposing to build a 95-megawatt wind farm near Paynesville with as many as 60 turbines, as well as the 42-megawatt Black Oak Wind Farm near Sauk Centre.

The company also is working with landowners who formed Getty Wind, a 40-megawatt wind project next to Black Oak.

All three projects have received final approval from state regulators. Geronimo has been trying to find a utility willing to purchase power generated by the wind farms.

Betsy Engelking, vice president of Geronimo, called the tax extension “good news.” She said Geronimo has been negotiating with several potential power buyers, but because of the uncertainty surrounding the tax credit, “we haven’t really been able to reach the finish line with any of them.”

Engelking believes potential buyers will see the extension as a narrow window of time to purchase wind power at a relatively low cost.

Projects that are farther along and already have final permits will have an advantage, she said.

“We feel the earlier we’re able to bring contracts in and start making commitments to purchase components (and) to contract with builders, that we’ll be able to get better prices for our customers,” Engelking said.

Wind power still must compete with other forms of energy including natural gas, which has been at record low prices. Engelking hopes utilities take a long-term approach when making purchasing decisions.

“The price of natural gas is low now, but that doesn’t mean it’s going to be low forever,” she said. “… The opportunity to lock in and have a little bit of a hedge against gas price increases also is important.”