Could Congress actually end lucrative tax credits for wind energy
production? Former Oklahoma Sen. Don Nickles is optimistic that
lawmakers will not extend tax credits for wind energy as pressure mounts
to reform the tax code and cut spending.
“I think there is a good chance it won’t be extended,” Nickles told
The Daily Caller News Foundation. “I think a lot of members are really
focused on it. Members realize if you do it, it will cost billions
more.”
“I think they realized the sentiment has turned, the economics have
turned — big time,” said Nickles, who served as Oklahoma’s Republican
Senator from 1981 to 2005 and was around when wind was first subsidized
in the early 1990s.
Congressional Republicans have ramped up their campaign against the
Wind Production Tax Credit, or Wind PTC, arguing that the tax credit
should be cut as part comprehensive tax reform talks taken up in the House and Senate.
“As the House Ways and Means Committee takes on the commendable, but
difficult, task of enacting revenue-neutral tax reform legislation, the
PTC should be excluded from there or in any tax extenders legislation
that the committee may consider,” reads
a letter from 52 lawmakers to committee Chairman Rep. Dave Camp, who is
heading up tax reform talks with Montana Democratic Sen. Max Baucus.
The wind industry and allied lawmakers have opposed ending the tax
credit, arguing that it would be a huge setback for the wind industry
and harm economic growth in wind-heavy states like Iowa.
Our nation has some of the best wind resources in the world, but the
lack of stable policy hinders the nation’s ability to develop them
fully,” reads
a letter from 11 state governors to House and Senate leadership. “The
nation’s wind industry developers do not need this tax credit forever,
but they do need policy certainty in the near term to bring their costs
to a fully competitive level.”
The Wind PTC was first enacted in 1992 and gave wind producers 1.5
cents for every kilowatt hour of electricity generated in the first ten
years of operation. The subsidy has ballooned to 2.3 cents per kilowatt
hour this year and the Joint Committee on Taxation estimates that
extending the tax credit for another year would cost $6 billion.
“I remember when it passed in ‘92 and we were assured it was
temporary,” Nickles told TheDCNF. “Since then it’s been extended seven
times.”
Nickles and his fellow Republicans argue that wind energy is not
reliable enough to provide baseload power, so it requires fossil fuels
to back it up — eliminating the touted environmental benefits of the
renewable energy source.
“Wind doesn’t blow all the time,” Nickles said. “For reliability,
utilities usually have to purchase a gas-fired generator as a back-up.
It blows at night when grids need the power least, it’s generating most
of its power off-peak and crowding out more economical power in the
process.”
Furthermore, wind producer could be facing increased legal trouble as
the Obama administration has finally started to prosecute wind farms
for the killing of federally protected birds and eagles.
A subsidiary of Duke Energy agreed
to pay $1 million in fines for the killing of 160 birds at two wind
farms in Wyoming — marking the first time the Obama administration has
prosecuted wind farm operators for killing federally protected birds.
“This case represents the first criminal conviction under the
Migratory Bird Treaty Act for unlawful avian takings at wind projects,”
said Robert Dreher, acting assistant attorney general for the Department
of Justice’s environment division.
“No form of energy generation, or human activity for that matter, is
completely free of impacts and wind energy is no exception,” the
American Wind Energy Association said in a statement.
“When coupled with the fact that experts globally see climate change
as the single greatest threat to wildlife and their habitats, wind
energy – which is produced without creating air or water pollution,
greenhouse gases, use water, require mining, or drilling for or
transportation of fuel, or generate hazardous waste requiring permanent
storage – is a key to both meeting our nation’s energy needs and
protecting wildlife in the U.S. and abroad,” the statement continued.
Wind turbines kill 573,000 birds and 888,000 bats each year in the
U.S., according to an independent study published earlier this year.
“As wind energy continues to expand, there is urgent need to improve
fatality monitoring methods, especially in the implementation of
detection trials, which should be more realistically incorporated into
routine monitoring,” writes K. Shawn Smallwood, the study’s author.
Source
Thursday, November 28, 2013
First Wind Company Criminally Convicted for Bird Deaths
In the first criminal conviction of a wind company for killing
birds, the Department of Justice (DOJ) announced they settled with Duke
Energy for $1 million.
Duke Energy Renewables pleaded guilty in the US District Court in Wyoming to violating the federal Migratory Bird Treaty Act for the deaths of endangered birds. This is the first-ever criminal enforcement of the Migratory Bird Treaty Act for a wind farm.
Between 2009-2013, 14 golden eagles and 149 other protected birds - including hawks, blackbirds, larks, wrens and sparrows - were killed at two Wyoming wind farms owned by Duke Energy. The Campbell Hill and Top of the World wind farms have 176 turbines and are sited on private agricultural land.
Until now, even though every death of a protected bird violates federal law, no wind company has been held liable. Wind companies can apply for a federal permit (which is opposed by the conservation community) but not a single company has done so.
Under the settlement, Duke will pay fines and restitution of $1 million and is placed on probation for five years, during which it must implement an environmental compliance plan to prevent bird deaths at its four Wyoming wind plants - expected to cost $600,000 a year. Duke must also apply for an Eagle Take Permit which, if granted, will provide a framework for how to minimize and mitigate golden eagle deaths at the wind farms, states DOJ.
"This is a welcome action by DOJ and one that we have long anticipated," says Dr. George Fenwick, President of American Bird Conservancy (ABC), a long-time advocate for stronger federal management of the wind industry. "We are pro-wind, but development needs to be Bird Smart. The unfortunate reality is that the flagrant violations of the law seen in this case are widespread."
In early 2012, the Fish & Wildlife Service published voluntary operating and siting guidelines for the wind industry, and this year, they released Eagle Conservation Plan Guidance. ABC believes these guidelines would be much more effective at preventing bird deaths if they were mandatory, with project permits used to cover costs.
Because guidelines are voluntary, "companies have been able to pay lip service to bird protection laws and then largely do what they want. Poorly sited wind projects exist or are being planned that clearly ignore the advice of federal and state biologists who have few, if any, means of preventing them from going ahead," says Dr. Michael Hutchins, who coordinates the National Bird Smart Wind Energy Campaign for ABC.
"In this plea agreement, Duke Energy Renewables acknowledges that it constructed these wind projects in a manner it knew beforehand would likely result in avian deaths. To its credit, once the projects came on line and began causing avian deaths, Duke took steps to minimize the hazard, and with this plea agreement has committed to an extensive compliance plan to minimize bird deaths at its Wyoming facilities and to devote resources to eagle preservation and rehabilitation efforts," says Robert Dreher, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division.
"We deeply regret the impacts of golden eagles at two of our wind facilities," says Greg Wolf, president of Duke Energy Renewables. "Our goal is to provide the benefits of wind energy in the most environmentally responsible way possible."
How the $1 million fine will be disbursed:
Several tools are available to help wind developers choose the best sites based on wind and environmental concerns, including one developed by National Renewable Energy Lab and another by ABC.
ABC estimates that as the wind industry has grown in the US, bird deaths have risen from 440,000 in 2009 to 600,000 in 2012.
How many birds will die as the wind industry continues to grow? Clearly, strong siting and operational regulations are needed, says Hutchins. "We believe it's necessary to enforce development restrictions on wind, such as avoiding bird migration corridors and places where protected species and sensitive habitats are present."
Enacted way back in 1918, the Migratory Bird Treaty Act implements US commitments with Great Britain (for Canada), Mexico, Japan and Russia. The Act protects over 1,000 species of birds.
Source
Duke Energy Renewables pleaded guilty in the US District Court in Wyoming to violating the federal Migratory Bird Treaty Act for the deaths of endangered birds. This is the first-ever criminal enforcement of the Migratory Bird Treaty Act for a wind farm.
Between 2009-2013, 14 golden eagles and 149 other protected birds - including hawks, blackbirds, larks, wrens and sparrows - were killed at two Wyoming wind farms owned by Duke Energy. The Campbell Hill and Top of the World wind farms have 176 turbines and are sited on private agricultural land.
Until now, even though every death of a protected bird violates federal law, no wind company has been held liable. Wind companies can apply for a federal permit (which is opposed by the conservation community) but not a single company has done so.
Under the settlement, Duke will pay fines and restitution of $1 million and is placed on probation for five years, during which it must implement an environmental compliance plan to prevent bird deaths at its four Wyoming wind plants - expected to cost $600,000 a year. Duke must also apply for an Eagle Take Permit which, if granted, will provide a framework for how to minimize and mitigate golden eagle deaths at the wind farms, states DOJ.
"This is a welcome action by DOJ and one that we have long anticipated," says Dr. George Fenwick, President of American Bird Conservancy (ABC), a long-time advocate for stronger federal management of the wind industry. "We are pro-wind, but development needs to be Bird Smart. The unfortunate reality is that the flagrant violations of the law seen in this case are widespread."
In early 2012, the Fish & Wildlife Service published voluntary operating and siting guidelines for the wind industry, and this year, they released Eagle Conservation Plan Guidance. ABC believes these guidelines would be much more effective at preventing bird deaths if they were mandatory, with project permits used to cover costs.
Because guidelines are voluntary, "companies have been able to pay lip service to bird protection laws and then largely do what they want. Poorly sited wind projects exist or are being planned that clearly ignore the advice of federal and state biologists who have few, if any, means of preventing them from going ahead," says Dr. Michael Hutchins, who coordinates the National Bird Smart Wind Energy Campaign for ABC.
"In this plea agreement, Duke Energy Renewables acknowledges that it constructed these wind projects in a manner it knew beforehand would likely result in avian deaths. To its credit, once the projects came on line and began causing avian deaths, Duke took steps to minimize the hazard, and with this plea agreement has committed to an extensive compliance plan to minimize bird deaths at its Wyoming facilities and to devote resources to eagle preservation and rehabilitation efforts," says Robert Dreher, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division.
"We deeply regret the impacts of golden eagles at two of our wind facilities," says Greg Wolf, president of Duke Energy Renewables. "Our goal is to provide the benefits of wind energy in the most environmentally responsible way possible."
How the $1 million fine will be disbursed:
- $400,000 for the federally-administered North American Wetlands Conservation Fund
- $100,000 for the State of Wyoming
- $160,000 for the National Fish and Wildlife Foundation, designated for golden eagle conservation projects and research on how they interact with wind turbines
- $340,000 to a conservation fund to buy golden eagle habitat in Wyoming
Several tools are available to help wind developers choose the best sites based on wind and environmental concerns, including one developed by National Renewable Energy Lab and another by ABC.
ABC estimates that as the wind industry has grown in the US, bird deaths have risen from 440,000 in 2009 to 600,000 in 2012.
How many birds will die as the wind industry continues to grow? Clearly, strong siting and operational regulations are needed, says Hutchins. "We believe it's necessary to enforce development restrictions on wind, such as avoiding bird migration corridors and places where protected species and sensitive habitats are present."
Enacted way back in 1918, the Migratory Bird Treaty Act implements US commitments with Great Britain (for Canada), Mexico, Japan and Russia. The Act protects over 1,000 species of birds.
Source
Tuesday, November 26, 2013
First Wind grows by aiming low
AURORA, Maine — The truck wound along the logging road in the deep
woods of this northern Maine community, snaking up a bump in the
landscape called Bull Hill. Only as the truck neared the base of a
95-meter-tall wind turbine did the silvery-white blades become visible
among the trees.
The 19-turbine wind farm at Bull Hill operates hundreds of feet lower than other industrial-scale wind farms, which typically spread along mountain ridges that are visible for miles. It is one of the latest developments of First Wind Holdings Inc. and an example of how the fast-growing Boston firm has become a dominant player in the Northeast.
First Wind, just over a decade old, has prospered by following an unconventional strategy that often avoids towering ridgelines, instead building at lower elevations and taking advantage of technological advances that allow turbines to generate electricity at lower wind speeds. Even so, the company’s projects have still attracted controversy, provoking outrage from some residents of rural and remote areas who say the peace, quiet, and beauty of natural landscapes is marred by the industrial developments.
Originally known as UPC Wind, the firm was founded in 2002 by Brian
Caffyn, a Massachusetts native who spent years working in the wind
industry in Italy. Gaynor, a former executive at a division of General
Electric, was the company’s fifth employee. He has led the firm since
2004.
Wind power was barely a speck on the energy landscape then, with oil prices as low as $33 a barrel.
Installations were few and far between, with about one-tenth of today’s generating capacity.
“God, it was uncharted waters,” Gaynor recalled recently at his company’s headquarters near South Station in Boston. “When I showed up, we had no money, no megawatts, virtually no people.”
First Wind built its first project in 2006 on the Hawaiian island of
Maui, a 30-megawatt wind farm along a ridge on the West Maui Mountains,
which tested another key component of its strategy: winning the support
of environmentalists. The ridge is home to three endangered bird species
and a type of endangered bat.
Before building, First Wind worked with experts on plans to protect those animals and committed a minimum of $1 million to make them happen.
“You have to find a way to coexist. You can’t look at a wind farm and say they have no environmental impacts,” Gaynor said. “That’s the ethic we took from there — I took from there — to every other project.”
First Wind has followed that ethic in New England, said Ted Koffman, executive director of Maine Audubon, a nonprofit wildlife conservation group that has monitored large wind developments for more than a decade. First Wind, he said, has proved its willingness to work with environmental organizations and communities to protect rare and sensitive habitats.
The company sends out analysts to study bird populations, talking to hikers who frequent the location where they plan to build, and sometimes helping to build wildlife sanctuaries.
“First Wind is not always going to agree with us because we want the Cadillac of all best-management practices, and to go above and beyond what the law requires,” Koffman said, but “they’re often very willing.”
While building its Bull Hill wind farm, First Wind worked to accommodate outdoor enthusiasts, improving some access roads, leaving the surrounding area open to snowmobiles and ATVs, and adding picnic tables for visitors to use. First Wind also limits the construction footprint of its projects, said Sean Mahoney, executive vice president for the nonprofit Conservation Law Foundation in Maine, which has supported several of First Wind’s projects.
The company often uses existing logging roads, as it did at Bull Hill, to transport equipment and parts, and does something else worth noting, said Mahoney. It clusters projects around existing transmission to avoid the need build new lines, which might have to cross sensitive natural areas.
Percy L. Brown Jr., a commissioner of Hancock County, where the wind farm is located, said he was initially wary of First Wind’s impact. But the project has brought benefits to the community, including an agreement by the company to pay the county $200,000 a year for the next two decades.
“We can utilize these funds for public purposes,” Brown said, “property tax reduction, economic development, [or] tourism and promotion, reduction of energy costs.”
But First Wind has also attracted fierce critics, who argue its industrial installations are out of place in remote, natural areas, destroying landscapes and property values. Some blame the rotating turbine blades for headaches and dizzy spells.
In Maine, community groups such as Friends of Maine’s Mountains have repeatedly opposed more wind development in favor of hydropower, which generates about quarter of Maine’s electricity. Christopher O’Neil, a spokesman for Friends of Maine’s Mountains, said the relatively small amount of power generated by wind energy, an intermittent source, is not worth the environmental damage.
In Hawaii, First Wind has come under scrutiny following several battery fires at a wind farm on Oahu Island, including one that shut the site for a year. On Maui, some critics say First Wind’s turbines have marred the view of the ridge, visible as planes descend onto the island. Still others say the wind projects have failed to lower electricity prices in Hawaii, the highest in the nation.
“If you heard the message as, ‘Your bill is going to drop,’ those people feel a sense of disappointment,” said Doug McLeod, Maui County’s energy commissioner.
First Wind said it has no control over electric rates set by the state, but knows that the energy its produces is cheaper than other sources of power in Hawaii. Gaynor added that he’s not surprised by criticism there and elsewhere.
“You are always going to have someone opposed to anything new,” he said, “whether it’s a shopping mall, or a house, or a telephone pole.”
In First Wind’s Boston headquarters, Gaynor strode past a room where employees watched a bank of screens, monitoring 17,000 data points, from energy production to weather conditions, coming in each second from the company’ turbines.
Gaynor said he sees more expansion ahead. The company, which employs more than 200, including 70 in Massachusetts, recently launched a solar power division. In addition, First Wind’s systems are built to monitor up to 3,000 megawatts of energy projects — triple today’s capacity.
“That’s why we have empty desks,” Gaynor said, pointing to vacant cubicles around the office. “We hope to continue to grow.”
Source
The 19-turbine wind farm at Bull Hill operates hundreds of feet lower than other industrial-scale wind farms, which typically spread along mountain ridges that are visible for miles. It is one of the latest developments of First Wind Holdings Inc. and an example of how the fast-growing Boston firm has become a dominant player in the Northeast.
First Wind, just over a decade old, has prospered by following an unconventional strategy that often avoids towering ridgelines, instead building at lower elevations and taking advantage of technological advances that allow turbines to generate electricity at lower wind speeds. Even so, the company’s projects have still attracted controversy, provoking outrage from some residents of rural and remote areas who say the peace, quiet, and beauty of natural landscapes is marred by the industrial developments.
First Wind today owns and operates 12
wind farms in six states, its portfolio comprising more than 500
turbines with a combined generating capacity of roughly 1,000 megawatts,
or enough to power about 285,000 homes. Its revenues have soared to
about $250 million a year from just $7.1 million in 2006, according to
the company and financial filings, as it has targeted states such as New
York, Maine, and Hawaii where high energy costs and friendly renewable
energy policies make wind power competitive.
“We’re focused on places where it makes economic sense,” said chief executive Paul J. Gaynor.
Wind power was barely a speck on the energy landscape then, with oil prices as low as $33 a barrel.
Installations were few and far between, with about one-tenth of today’s generating capacity.
“God, it was uncharted waters,” Gaynor recalled recently at his company’s headquarters near South Station in Boston. “When I showed up, we had no money, no megawatts, virtually no people.”
Before building, First Wind worked with experts on plans to protect those animals and committed a minimum of $1 million to make them happen.
“You have to find a way to coexist. You can’t look at a wind farm and say they have no environmental impacts,” Gaynor said. “That’s the ethic we took from there — I took from there — to every other project.”
First Wind has followed that ethic in New England, said Ted Koffman, executive director of Maine Audubon, a nonprofit wildlife conservation group that has monitored large wind developments for more than a decade. First Wind, he said, has proved its willingness to work with environmental organizations and communities to protect rare and sensitive habitats.
The company sends out analysts to study bird populations, talking to hikers who frequent the location where they plan to build, and sometimes helping to build wildlife sanctuaries.
“First Wind is not always going to agree with us because we want the Cadillac of all best-management practices, and to go above and beyond what the law requires,” Koffman said, but “they’re often very willing.”
While building its Bull Hill wind farm, First Wind worked to accommodate outdoor enthusiasts, improving some access roads, leaving the surrounding area open to snowmobiles and ATVs, and adding picnic tables for visitors to use. First Wind also limits the construction footprint of its projects, said Sean Mahoney, executive vice president for the nonprofit Conservation Law Foundation in Maine, which has supported several of First Wind’s projects.
The company often uses existing logging roads, as it did at Bull Hill, to transport equipment and parts, and does something else worth noting, said Mahoney. It clusters projects around existing transmission to avoid the need build new lines, which might have to cross sensitive natural areas.
Percy L. Brown Jr., a commissioner of Hancock County, where the wind farm is located, said he was initially wary of First Wind’s impact. But the project has brought benefits to the community, including an agreement by the company to pay the county $200,000 a year for the next two decades.
“We can utilize these funds for public purposes,” Brown said, “property tax reduction, economic development, [or] tourism and promotion, reduction of energy costs.”
But First Wind has also attracted fierce critics, who argue its industrial installations are out of place in remote, natural areas, destroying landscapes and property values. Some blame the rotating turbine blades for headaches and dizzy spells.
In Maine, community groups such as Friends of Maine’s Mountains have repeatedly opposed more wind development in favor of hydropower, which generates about quarter of Maine’s electricity. Christopher O’Neil, a spokesman for Friends of Maine’s Mountains, said the relatively small amount of power generated by wind energy, an intermittent source, is not worth the environmental damage.
In Hawaii, First Wind has come under scrutiny following several battery fires at a wind farm on Oahu Island, including one that shut the site for a year. On Maui, some critics say First Wind’s turbines have marred the view of the ridge, visible as planes descend onto the island. Still others say the wind projects have failed to lower electricity prices in Hawaii, the highest in the nation.
“If you heard the message as, ‘Your bill is going to drop,’ those people feel a sense of disappointment,” said Doug McLeod, Maui County’s energy commissioner.
First Wind said it has no control over electric rates set by the state, but knows that the energy its produces is cheaper than other sources of power in Hawaii. Gaynor added that he’s not surprised by criticism there and elsewhere.
“You are always going to have someone opposed to anything new,” he said, “whether it’s a shopping mall, or a house, or a telephone pole.”
In First Wind’s Boston headquarters, Gaynor strode past a room where employees watched a bank of screens, monitoring 17,000 data points, from energy production to weather conditions, coming in each second from the company’ turbines.
Gaynor said he sees more expansion ahead. The company, which employs more than 200, including 70 in Massachusetts, recently launched a solar power division. In addition, First Wind’s systems are built to monitor up to 3,000 megawatts of energy projects — triple today’s capacity.
“That’s why we have empty desks,” Gaynor said, pointing to vacant cubicles around the office. “We hope to continue to grow.”
Source
Friday, November 22, 2013
UTILITY COMPANY SENTENCED IN WYOMING FOR KILLING PROTECTED BIRDS AT WIND PROJECTS
WASHINGTON – Duke Energy Renewables Inc., a subsidiary of Duke Energy Corp.,
based in Charlotte, N.C., pleaded guilty in U.S. District Court in Wyoming today
to violating the federal Migratory Bird Treaty Act (MBTA) in connection with the
deaths of protected birds, including golden eagles, at two of the company’s wind
projects in Wyoming. This case represents the first ever criminal
enforcement of the Migratory Bird Treaty Act for unpermitted avian takings at
wind projects.
Under
a plea agreement with the government, the company was sentenced to pay fines,
restitution and community service totaling $1 million and was placed on
probation for five years, during which it must implement an environmental
compliance plan aimed at preventing bird deaths at the company’s four commercial
wind projects in the state. The company is also required to apply for an
Eagle Take Permit which, if granted, will provide a framework for minimizing and
mitigating the deaths of golden eagles at the wind projects.
The
charges stem from the discovery of 14 golden eagles and 149 other protected
birds, including hawks, blackbirds, larks, wrens and sparrows by the company at
its “Campbell Hill” and “Top of the World” wind projects in Converse County
between 2009 and 2013. The two wind projects are comprised of 176 large
wind turbines sited on private agricultural land.
According to the charges and other information presented in court, Duke Energy
Renewables Inc. failed to make all reasonable efforts to build the projects in a
way that would avoid the risk of avian deaths by collision with turbine blades,
despite prior warnings about this issue from the U.S. Fish and Wildlife Service
(USFWS). However, the company cooperated with the USFWS investigation and
has already implemented measures aimed at minimizing avian deaths at the
sites.
“This
case represents the first criminal conviction under the Migratory Bird Treaty
Act for unlawful avian takings at wind projects,” said Robert G. Dreher, Acting
Assistant Attorney General for the Justice Department's Environment and Natural
Resources Division. “In this plea agreement, Duke Energy Renewables
acknowledges that it constructed these wind projects in a manner it
knew beforehand would likely result in avian deaths. To its credit, once
the projects came on line and began causing avian deaths, Duke took steps to
minimize the hazard, and with this plea agreement has committed to an extensive
compliance plan to minimize bird deaths at its Wyoming facilities and to devote
resources to eagle preservation and rehabilitation efforts.”
“The
Service works cooperatively with companies that make all reasonable efforts to
avoid killing migratory birds during design, construction and operation of
industrial facilities,” said William Woody, Assistant Director for Law
Enforcement of the U.S. Fish and Wildlife Service. “But we will continue
to investigate and refer for prosecution cases in which companies - in any
sector, including the wind industry - fail to comply with the laws that protect
the public’s wildlife resources.”
More
than 1,000 species of birds, including bald and golden eagles, are protected
under the Migratory Bird Treaty Act (MBTA). The MBTA, enacted in 1918,
implements this country’s commitments under avian protection treaties with Great
Britain (for Canada), Mexico, Japan and Russia. The MBTA provides a
misdemeanor criminal sanction for the unpermitted taking of a listed species by
any means and in any manner, regardless of fault. The maximum penalty for
an unpermitted corporate taking under the MBTA is $15,000 or twice the gross
gain or loss resulting from the offense, and five years’ probation.
According to papers filed with the court, commercial wind power projects can
cause the deaths of federally protected birds in four primary ways: collision
with wind turbines, collision with associated meteorological towers, collision
with, or electrocution by, associated electrical power facilities, and nest
abandonment or behavior avoidance from habitat modification. Collision and
electrocution risks from power lines (collisions and electrocutions) and guyed
structures (collision) have been known to the utility and communication
industries for decades, and specific methods of minimizing and avoiding the
risks have been developed, in conjunction with the USFWS. The USFWS issued its
first interim guidance about how wind project developers could avoid impacts to
wildlife from wind turbines in 2003, and replaced these with a “tiered” approach
outlined in the Land-Based Wind Energy Guidelines (2012 LBWEGs), developed with
the wind industry starting in 2007 and released in final form by the USFWS on
March 23, 2012. The Service also released Eagle Conservation Plan Guidance
in April 2013 and strongly recommends that companies planning or operating wind
power facilities in areas where eagles occur work with the agency to implement
that guidance completely.
For
wind projects, due diligence during the pre-construction stage—as described in
the 2003 Interim Guidelines and tiers I through III in the 2012 LBWEGs—by
surveying the wildlife present in the proposed project area, consulting with
agency professionals, determining whether the risk to wildlife is too high to
justify proceeding and, if not, carefully siting turbines so as to avoid and
minimize the risk as much as possible, is critically important because, unlike
electric distribution equipment and guyed towers, at the present time, no
post-construction remedies, except “curtailment” (i.e., shut-down), have been
developed that can “render safe” a wind turbine placed in a location of high
avian collision risk. Other experimental measures to reduce prey, detect
and deter avian proximity to turbines are being tested. In the western
United States, golden eagles may be particularly susceptible to wind turbine
blade collision by wind power facilities constructed in areas of high eagle use.
The
$400,000 fine imposed in the case will be directed to the federally-administered
North American Wetlands Conservation Fund. The company will also pay
$100,000 in restitution to the State of Wyoming, and perform community service
by making a $160,000 payment to the congressionally-chartered National Fish and
Wildlife Foundation, designated for projects aimed at preserving golden eagles
and increasing the understanding of ways to minimize and monitor interactions
between eagles and commercial wind power facilities, as well as enhance eagle
rehabilitation and conservation efforts in Wyoming. Duke Energy Renewables
is also required to contribute $340,000 to a conservation fund for the purchase
of land, or conservation easements on land, in Wyoming containing high-use
golden eagle habitat, which will be preserved and managed for the benefit of
that species. The company must implement a migratory bird compliance plan
containing specific measures to avoid and minimize golden eagle and other avian
wildlife mortalities at company’s four commercial wind projects in
Wyoming.
According to papers filed with the court, Duke Energy Renewables will spend
approximately $600,000 per year implementing the compliance plan. Within
24 months, the company must also apply to the U.S. Fish and Wildlife Service for
a Programmatic Eagle Take Permit at each of the two wind projects cited in the
case.
The
case was investigated by Special Agents of the U.S. Fish and Wildlife Service
and prosecuted by Senior Counsel Robert S. Anderson of the Justice Department’s
Environmental Crimes Section of the Environment and Natural Resources Division
and Assistant U.S. Attorney Jason Conder of the District of Wyoming.
Sunday, November 17, 2013
Invenergy in New York: blade break
Invenergy's Orangeville Wind Farm (formerly known as the Stony Creek Wind project) experienced a catastrophic blade break. The project, which is still under construction includes 58 GE 1.6-100 wind turbines (94 megawatts). The turbines are scheduled for commission the second week of December 2013. Witnesses at the site told WindAction that blade debris flew past the 511-foot safety zone set by the town. This setback distance was requested by Eric Miller from Invenergy to get more turbines in a smaller area. General Electric said 1.5 times hub height plus rotor diameter or 885’ would be necessary.
Source
Northeast Wind bags refinancing
A First Wind-Emera joint venture has refinanced its debt with a new corporate credit facility consisting of a $320m term loan B debt facility and a $75m letter of credit facility.
Northeast Wind Partners’ own 419MW of wind power projects in the northeast United States.
Pricing on the new term loan was set at LIBOR plus 400 basis points with a 1% LIBOR floor, with 99% of original issue discount. The proceeds were used to refinance the joint venture’s existing debt.
Morgan Stanley, Goldman Sachs, BNP Paribas, KeyBank, Union Bank, CIT Group, Industrial and Commercial Bank of China were joint lead arrangers and joint book-runners for the syndication of the term loan B facility.
Northeast Wind tried to refinance its debt this past summer but postponed efforts because of unfavorable market conditions.
Boston-based First Wind retains 51% and Nova Scotia-headquartered Emera owns 49% of Northeast Wind. First Wind is the managing partner, operating the wind energy projects.
Source
Northeast Wind Partners’ own 419MW of wind power projects in the northeast United States.
Pricing on the new term loan was set at LIBOR plus 400 basis points with a 1% LIBOR floor, with 99% of original issue discount. The proceeds were used to refinance the joint venture’s existing debt.
Morgan Stanley, Goldman Sachs, BNP Paribas, KeyBank, Union Bank, CIT Group, Industrial and Commercial Bank of China were joint lead arrangers and joint book-runners for the syndication of the term loan B facility.
Northeast Wind tried to refinance its debt this past summer but postponed efforts because of unfavorable market conditions.
Boston-based First Wind retains 51% and Nova Scotia-headquartered Emera owns 49% of Northeast Wind. First Wind is the managing partner, operating the wind energy projects.
Source
Sunday, November 10, 2013
Suit Against First Wind Over Noise Pollution Dismissed
http://www.mpbn.net/News/MaineNewsArchive/tabid/181/ctl/ViewItem/mid/3475/ItemId/30879/Default.aspx
The summary judgment for First Wind upholds a lower court ruling made earlier this year on a lawsuit brought by Michael Gosselin of Mars Hill.
"I'm feeling terribly disappointed in the justice system because I thought truth and justice would prevail," Gosselin says. "And I'm very disappointed and really, really shocked."
Gosselin, a disabled veteran who suffers from PTSD, claimed in the suit that noise created by the turbines, which are situated about 1.7 miles from his home, have made his life so stressful that he's had to build a noise proof bunker in his garage.
"I'm going to have to continue sleeping in the garage until we can move out of the area I guess," he says.
Gosselin was seeking a buyout of his property for fair market value. While First Wind settled similar disputes with 18 neighboring landowners last year, Gosselin was excluded from that case because he was judged to be too far from the turbines.
First Wind spokesman John Lamontagne says the company is pleased with the ruling, and glad that all parties are spared the ordeal of a trial.
"We work very hard to be good neighbors in the Mars Hill community," Lamontagne says, "and I think we've been very successful when it comes to that."
In the ruling, the justices say the lower court did not err when finding against Gosselin, who claimed the turbines created a nuisance and emotional distress.
Claims of personal and property damage from related activities were also tossed out, and a new claim of breach of contract was not heard. Gosselin says he may petition the U.S. Supreme Court to review the ruling.
The summary judgment for First Wind upholds a lower court ruling made earlier this year on a lawsuit brought by Michael Gosselin of Mars Hill.
"I'm feeling terribly disappointed in the justice system because I thought truth and justice would prevail," Gosselin says. "And I'm very disappointed and really, really shocked."
Gosselin, a disabled veteran who suffers from PTSD, claimed in the suit that noise created by the turbines, which are situated about 1.7 miles from his home, have made his life so stressful that he's had to build a noise proof bunker in his garage.
"I'm going to have to continue sleeping in the garage until we can move out of the area I guess," he says.
Gosselin was seeking a buyout of his property for fair market value. While First Wind settled similar disputes with 18 neighboring landowners last year, Gosselin was excluded from that case because he was judged to be too far from the turbines.
First Wind spokesman John Lamontagne says the company is pleased with the ruling, and glad that all parties are spared the ordeal of a trial.
"We work very hard to be good neighbors in the Mars Hill community," Lamontagne says, "and I think we've been very successful when it comes to that."
In the ruling, the justices say the lower court did not err when finding against Gosselin, who claimed the turbines created a nuisance and emotional distress.
Claims of personal and property damage from related activities were also tossed out, and a new claim of breach of contract was not heard. Gosselin says he may petition the U.S. Supreme Court to review the ruling.
Sunday, November 03, 2013
Thursday, October 31, 2013
First Wind and Emera re-launch Northeast Wind
First Wind and Emera are again trying to close a seven-year term loan B for the Northeast Wind portfolio. The latest attempt comes just two months after the two pulled a $385 million financing package. Northeast Wind’s latest incarnation is a $315 million term loan B, priced at 400-425bp over Libor, with a Libor floor of 1% and an original issue discount of 1%. Standard & Poor’s (S&P) rates the debt B+....
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Wednesday, October 30, 2013
Cape Wind not worth the price
Brookline —
The Cape Wind project, started by Jim Gordon in 2001, has largely
turned into a distraction for renewable energy in New England. The
projected construction cost rose from $500 million in 2001, for 168
megawatt annual average (not peak) generating capacity, to $2.6 billion
recently for 183 MW.
Comparable conventional electricity is just across the Charles River from us in Cambridge: the Kendall Square station. Opened by Cambridge Light and Power in 1949 burning coal, it was converted to efficient combined-cycle natural gas by Mirant in 2000, and is now run by NRG Energy.
Kendall Square has a year-round (not peak) generating capacity of 218 MW. For the three most recent calendar years, it averaged 68 percent of capacity, selling into a New England bulk electricity market with average wholesale prices per kilowatt-hour of $0.051 in 2010, $0.048 in 2011, and $0.037 in 2012 — per ISO New England.
In 2012, Cape Wind had contracts to sell bulk electricity for $0.187 per kWh that it cannot fulfill because its offshore wind farm remains unbuilt. That’s about five times the actual, average wholesale price of electricity in New England for the year.
In September 2013, Massachusetts and Connecticut state agencies approved long-term agreements by Northeast Utilities, National Grid and other utilities to buy bulk electricity from land-based wind farms run by First Wind, Iberdrola Renewables and Exergy Development at an average wholesale price of less than $0.080 per kWh.
The total capacity of land-based wind power coming under contract in 2013 is nearly twice what was promised by Cape Wind. The price per kWh is less than half the price from Cape Wind. If Cape Wind had built its offshore wind farm at the cost projected in 2001, it too could sell renewable energy at a fair price.
— Craig Bolon, Fuller Street
Source
Comparable conventional electricity is just across the Charles River from us in Cambridge: the Kendall Square station. Opened by Cambridge Light and Power in 1949 burning coal, it was converted to efficient combined-cycle natural gas by Mirant in 2000, and is now run by NRG Energy.
Kendall Square has a year-round (not peak) generating capacity of 218 MW. For the three most recent calendar years, it averaged 68 percent of capacity, selling into a New England bulk electricity market with average wholesale prices per kilowatt-hour of $0.051 in 2010, $0.048 in 2011, and $0.037 in 2012 — per ISO New England.
In 2012, Cape Wind had contracts to sell bulk electricity for $0.187 per kWh that it cannot fulfill because its offshore wind farm remains unbuilt. That’s about five times the actual, average wholesale price of electricity in New England for the year.
In September 2013, Massachusetts and Connecticut state agencies approved long-term agreements by Northeast Utilities, National Grid and other utilities to buy bulk electricity from land-based wind farms run by First Wind, Iberdrola Renewables and Exergy Development at an average wholesale price of less than $0.080 per kWh.
The total capacity of land-based wind power coming under contract in 2013 is nearly twice what was promised by Cape Wind. The price per kWh is less than half the price from Cape Wind. If Cape Wind had built its offshore wind farm at the cost projected in 2001, it too could sell renewable energy at a fair price.
— Craig Bolon, Fuller Street
Source
Foes file lawsuit to block Aroostook wind project
Opponents of a soon-to-be-started wind farm in the Aroostook County town
of Oakfield took legal action Tuesday in a last-minute attempt to stop
the project.
They filed a lawsuit in U.S. District Court in Bangor, aimed at a 50-turbine wind farm to be erected by First Wind of Boston through its subsidiary, Evergreen Wind II LLC. Initial road construction is set to begin before winter on the 150-megawatt project.
A key focus of the complaint, reviewed by the Portland Press Herald, is that the dredging and filling associated with the 59 miles of transmission lines needed to connect the wind farm to the regional power grid would degrade streams that support Atlantic salmon and violate the federal Clean Water Act. The complaint names the U.S. Army Corps of Engineers and the U.S. Department of the Interior as defendants.
A spokesman for First Wind, John Lamontagne, said the company hadn’t yet reviewed the complaint. But he noted that the Army Corps and U.S. Fish and Wildlife Service thoroughly reviewed the $400 million project and its impacts, and concluded that it complied with federal laws.
“We believe this project will be able to deliver significant economic benefits to the region and the town of Oakfield while generating clean renewable energy that will power thousands of homes,” Lamontagne said.
The Oakfield lawsuit mirrors a legal tactic used last year by wind power foes who are trying to block an expansion of the Kibby Mountain wind farm in northwestern Maine. That case is still pending.
Nearly seven years since Maine’s first wind farm went up on Mars Hill, controversy continues over the visual, noise and environmental impacts of power production around the state’s rural lakes and mountains. Opponents have been increasingly frustrated by plans for larger wind farms, a result of changing technology and new, long-term contracts for renewable energy with utilities in southern New England. In Oakfield and at TransCanada’s planned expansion on Sisk Mountain in Franklin County, they see a potential legal path to challenge permits in federal courts.
“Part of this shifts (opposition) from the turbines to the water bodies,” said Lynne Williams, a lawyer representing Oakfield opponents.
Read the entire article
They filed a lawsuit in U.S. District Court in Bangor, aimed at a 50-turbine wind farm to be erected by First Wind of Boston through its subsidiary, Evergreen Wind II LLC. Initial road construction is set to begin before winter on the 150-megawatt project.
A key focus of the complaint, reviewed by the Portland Press Herald, is that the dredging and filling associated with the 59 miles of transmission lines needed to connect the wind farm to the regional power grid would degrade streams that support Atlantic salmon and violate the federal Clean Water Act. The complaint names the U.S. Army Corps of Engineers and the U.S. Department of the Interior as defendants.
A spokesman for First Wind, John Lamontagne, said the company hadn’t yet reviewed the complaint. But he noted that the Army Corps and U.S. Fish and Wildlife Service thoroughly reviewed the $400 million project and its impacts, and concluded that it complied with federal laws.
“We believe this project will be able to deliver significant economic benefits to the region and the town of Oakfield while generating clean renewable energy that will power thousands of homes,” Lamontagne said.
The Oakfield lawsuit mirrors a legal tactic used last year by wind power foes who are trying to block an expansion of the Kibby Mountain wind farm in northwestern Maine. That case is still pending.
Nearly seven years since Maine’s first wind farm went up on Mars Hill, controversy continues over the visual, noise and environmental impacts of power production around the state’s rural lakes and mountains. Opponents have been increasingly frustrated by plans for larger wind farms, a result of changing technology and new, long-term contracts for renewable energy with utilities in southern New England. In Oakfield and at TransCanada’s planned expansion on Sisk Mountain in Franklin County, they see a potential legal path to challenge permits in federal courts.
“Part of this shifts (opposition) from the turbines to the water bodies,” said Lynne Williams, a lawyer representing Oakfield opponents.
Read the entire article
Saturday, October 26, 2013
Allegany Wind Farm project dropped
A wind power development company has pulled out of its contract to build wind turbines in the Town of Allegany.
EverPower Holdings, a Pittsburgh-based maker of utility-grade wind turbines, will not file a permit extension to develop the Allegany Wind Farm project, which called for 29 turbines to be built on the hills above Chipmonk Road. The company blamed backing out on delays in the embattled project’s progress and turbine costs that have risen by millions of dollars in the intervening years.
“We’re hoping to make a fresh attempt next year,” Shears said.
The original permit was granted in 2011 by the Allegany Town Planning Board. Cattaraugus County residents raised concerns about quality of life issues associated with noise and visual clutter associated with the turbine project. That and other considerations kept EverPower from beginning construction in 2012.
“We didn’t have certainty of our ability to connect into the grid system at the end of 2012,” said Chris Shears, chief development officer for EverPower.
Earlier this year, EverPower filed a lawsuit against the Town of Allegany and the Allegany Planning Board, claiming the board’s request for a supplemental review of noise impacts, in light of the wind power company’s request to use larger turbine blades, was arbitrary. That suit was dismissed by State Supreme Court Justice Michael Nenno, who said EverPower’s conduct was willfully obstinate.
Source
EverPower Holdings, a Pittsburgh-based maker of utility-grade wind turbines, will not file a permit extension to develop the Allegany Wind Farm project, which called for 29 turbines to be built on the hills above Chipmonk Road. The company blamed backing out on delays in the embattled project’s progress and turbine costs that have risen by millions of dollars in the intervening years.
“We’re hoping to make a fresh attempt next year,” Shears said.
The original permit was granted in 2011 by the Allegany Town Planning Board. Cattaraugus County residents raised concerns about quality of life issues associated with noise and visual clutter associated with the turbine project. That and other considerations kept EverPower from beginning construction in 2012.
“We didn’t have certainty of our ability to connect into the grid system at the end of 2012,” said Chris Shears, chief development officer for EverPower.
Earlier this year, EverPower filed a lawsuit against the Town of Allegany and the Allegany Planning Board, claiming the board’s request for a supplemental review of noise impacts, in light of the wind power company’s request to use larger turbine blades, was arbitrary. That suit was dismissed by State Supreme Court Justice Michael Nenno, who said EverPower’s conduct was willfully obstinate.
Source
Thursday, October 24, 2013
APOV: New York wind wars
Congress’s last minute extension of the PTC or Production Tax Credit (aka: “Pork To Cronies”) within the December 31, 2012 fiscal cliff deal was good news for Big Wind corporate welfare profiteers, like Michael Polsky’s Invenergy. It was very bad news for rural/residential towns that are being targeted by industrial wind developers here in New York State, and across the nation.
Even though the Wyoming County, NY Town of Orangeville’s conflicted Town Board approved Invenergy’s “Stony Creek” project in the Fall of 2012, Invenergy admitted it would not go ahead with the project unless the PTC was extended. This again highlights the fact that the only thing Invenergy is interested in “harvesting” via its ‘wind farms’ is taxpayers’ money. Once Crony-Corruptocrats in DC extended the PTC in that midnight fiscal cliff deal, the once-beautiful rolling hills of the Town of Orangeville were doomed.
As Big Wind CEO, Patrick Jenevein candidly pointed out in his Wall Street Journal op-ed, “Wind power subsidies? No Thanks” and follow-up TV interview, “Wind farms are increasingly being built in less-windy locations,” because the wind industry is focused on reaping the lucrative taxpayer and ratepayer subsidies, rather than providing efficient, affordable, reliable electricity.
Nowhere is this proving to be more true than right here in New York State. Orangeville borders the Town of Attica here in the western part of the state. It’s a town that “First Wind LLC” pulled out of a number of years ago, after admitting that the Attica area “was not a good wind area.” It seems Jenevein knew exactly what he was talking about.
Economics 101
According to NYISO’s Goldbook, New York State’s installed wind factories averaged a pathetic 23.5% actual capacity factor in 2012. New York State wind factories are not generating enough electricity to even to pay for themselves over their short life spans. It’s basic economics, but it’s being ignored by politicians.
Renowned energy analyst Glenn Schleede examined the data on New York State’s wind factories and found that one 450-MW combined cycle generating unit near New York City (where the power is actually needed) would provide more power than all of New York State’s wind farms combined, at one-fourth the capital costs – and would significantly reduce CO2 emissions, while creating far more jobs than all those wind farm – without the added costs and impacts of all the transmission lines to New York City.
It’s no wonder New York has earned the dubious distinction of having the highest electricity rates in the continental United States: 17.7 cents per kilowatt-hour (kWh) – a whopping 53% above the national average! New York residents using 6,500 kWh of electricity annually will pay about $400 more per year for their electricity than if the state’s electricity prices were at the national average.
Despite making absolutely no economic sense, and despite the utter civil discord embroiling Towns across New York State for more than a decade, New York State continues to aggressively pursue further industrial wind development – with no effort whatsoever to protect the health, well-being or pocketbooks of New York State citizens, especially those living next to or under the wind turbines.
Governor Cuomo and ‘Article X’
During his tenure as Attorney General, Andrew Cuomo did nothing to protect New York State citizens from the predatory practices and collusion evident among Big Wind developers. Once he became Governor of New York, Cuomo actively began aiding and abetting Big Wind’s efforts to trample rural communities’ Constitutional private property rights in his pursuit of all things “green” (aka: Agenda 21), by signing into law the new “Article X (10)” contained within his 2011 “Power NY Act.”
Cuomo's new Article X put in place an ”Energy Siting Board” comprised of five Albany bureaucrats who now have the final say regarding the siting of “power-generating facilities” in NY – redefined to mean anything generating 25 MW or more. Cuomo’s intention to clear the way for Big Wind developers could not have been any more obvious had he rolled out a red carpet.
Article X proceedings are already being pursued by British Petroleum (BP) in Cape Vincent, NY, and by Iberdrola in Clayton, NY. These foreign-owned corporations intend to turn our beautiful Thousands Islands, St. Lawrence Seaway area into sprawling industrial wind factories. Devastating some of the most scenic, historic areas in the nation in pursuit of the “green” energy boondoggle of wind should have all Americans incensed – especially since they are paying for it!
In Lichtfield, NY, another Big Wind LLC tried to override the town’s restrictive zoning laws, by using Cuomo’s “Article X,” so that they could install 490-foot-tall turbines. Luckily for Litchfield residents, the FAA struck down Big Wind’s plans there.
Robert Bryce, Senior fellow at The Manhattan Institute, reported on the lawsuit going on in Herkimer County, NY due to the intolerable noise problems associated with industrial wind factories. His article title sums it up: “Backlash against Big Wind continues.” Other wind factories are in the works in New York, with unsuspecting towns yet to recognize the fate that awaits them.
Considering the growing list of problems associated with industrial wind factories in New York State (and worldwide), Governor Cuomo’s actions reflect criminal negligence by a duly-elected “public servant,” as he has not demanded health studies to safeguard those he was elected to serve and protect.
Real Estate 101: “Location, location, location!”
Adding insult to injury, Ben Hoen and his pals at the NRLB just came out with yet another bogus “report,” claiming industrial wind factories do not hurt property values. They can't really be serious, can they?
Any realtor who is not in bed with the wind industry will tell you, location is the most important factor when considering a home’s worth and value.
If you industrialize a neighborhood (and in the case of industrial wind energy, entire towns, and those neighboring them), you are going to devalue it.
Pretty much a no-brainer, right? Not according to Hoen and his pals in the ideologically-driven media.
Media Controlling the Message
After nearly a decade of researching and writing about industrial wind power, I’ve lost count of how many times my comments responding to wind-promoting articles have been rejected, and how many news publications refuse to report all relevant information regarding industrial wind power.
A number of local newspapers serving our area here in Western New York State – which has been targeted by industrial wind developers – have literally cut off all letters to the editor from local citizens regarding the industrial wind issue. These same newspapers continue to publish “Press Releases” and “project updates” on behalf of wind developers, and yet refuse to do any responsible, investigative journalism on the efficacy, effects and economics of wind power.
If “news”papers wonder why their circulation continues to drop, as people choose to get honest news elsewhere, they need look no further than their own refusal to adhere to “The Professional Journalists’ Code of Ethics,” which says “Support the open exchange of views, even views they find repugnant.”
If wind enthusiasts actually believe all they claim to about the supposed “wonders of wind,” then why do they need to control the message the way they do? The answer is evident.
Either they are so ideologically driven that facts are not “relevant” to them — or they are getting so rich via the wind scam that they must squelch factual information as much as possible, so that the “Emperor with No Clothes” doesn’t end up being exposed for what he is — a charlatan who is swindling taxpayers and ratepayers out of billions of dollars in the name of being “green.”
Mary Kay Barton lives in Silver Springs.
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Tuesday, October 22, 2013
Google’s Green Energy Brag: $375 Million from Taxpayers (or more)
On September 13, 2013, Google announced that it had signed a contract to buy the entire output of the 239 MW Happy Herford “wind farm” that is being developed by Chermac Energy near Amarillo, Texas. The project is expected to begin operation in late 2014.
Undoubtedly Chermac Energy is pleased to have a 20-year contract (purchased power agreement) for the sale of the electricity that will be produced. The Google deal will provide the developer a guaranteed cash stream that will enable project financing. [1]
Undoubtedly, Google is pleased with all the favorable publicity the company has received for being so environmentally committed even though the wind-generated electricity will not be used in a Google facility. Instead, according to Google, the electricity will be sold in the wholesale market and Google will purchase the electricity it needs from the utilities serving its facilities or a wholesale supplier. Google will “retire” the renewable energy credits (REC) resulting from the deal.
The big losers in the Google transaction will be taxpayers, a point that none of the media stories have mentioned. Specifically, taxpayers will have to pick up the cost of the tax breaks that the “wind farm” owner (currently Chermac) will enjoy.
As explained below, the tax burden that will be shifted from the “wind farm” owner to remaining taxpayers will be at least $170 million and probably more.
The most lucrative federal tax break for the project owners will probably be the federal wind “production tax credit” (PTC). This tax break will provide the owners with a tax credit, currently set at $0.023, for each kilowatt-hour of electricity that the “wind farm” produces during the first 10 years of operation. The $0.023 rate applicable during 2013 is subject to upward adjustment for inflation and undoubtedly will be increased during the next 10 years.
Also, the “wind farm” owners will likely qualify also for another lucrative federal tax break known as “accelerated depreciation” which allows the owners to depreciate for tax purposes the entire capital cost of the wind energy equipment over a five-year period, thus providing a significant cash flow benefit.
The actual cost of the PTC to taxpayers can only be estimated at this time since the amount paid depends on the amount of electricity produced as well as the rate at the time of production. The benefit to the owners and added tax burden to remaining taxpayers can be estimated with a few assumptions.
Specifically:
1. The stated capacity of the planned Happy Hereford “wind farm” is 239.2 megawatts (MW) or 239,200 kilowatts (kW).
2. Amount of electricity produced each year will only be known after the fact since this will depend on wind conditions at the site and condition of the turbines. Two large existing “wind farms” in the Amarillo areas had capacity factors of about 45% during 2011, among the highest in the U.S.[2]
3. Assuming that Happy Hereford will achieve a capacity of 45%, the project would produce approximately 942,926,400 kilowatt-hours (kWh) of electricity each year (that is, 239,200 kW capacity x 8760 hours per year x .45 capacity factor = 942,926,600 kWh).
4. Production of 942,926,400 kWh x the 2013 rate of $0.023 would produce an annual PTC break for the “wind farm” owners and annual cost to taxpayers of $21,687,307. At this rate, the tax break would be $216,873,070 over 10 years if production continued at the same level.
5. If the PTC rate is increased due to inflation adjustments to an average of $0.026 during the 10 year operation, the average annual PTC break would be $24,516,086 per year and $245,160,860 over the 10-year period.
Google had earlier announced the purchased the output of two other wind farms:
1. In July 2010, Google announced the purchase of 114 MW of the capacity of NextEra’s Story County II “wind farm” in Iowa. This project began producing electricity in 2009. Assuming a capacity factor of 35%, this project would produce 349,524,000 kWh of electricity per year and earn production tax credits of $8,039,052 in one year at a rate of $0.023 (the 2013 rate) or $80,390,520 in 10 years if the average rate over the 10 years turns out to be $0.023.
2. In April 2011, Google announced the purchase of the output of NextEra’s 100.8 Minco II “wind farm” in Oklahoma. This project began producing electricity in 2011. Assuming a capacity factor of 40%, this project would produce 353,203,200 kWh of electricity per year and earn production tax credits of $8,123,674 in one year when receiving a rate of $0.023 (the 2013 rate) or $91,832,830 over 10 years if the average rate over that time turns out to be $0.026.
As indicated earlier, the actual 10-year cost of the wind Production Tax Credit (PTC) tax break for the owners of the three projects will depend on their actual production and the PTC rates that are in effect during each of those 10 years.
Based on the assumptions outlined above, the three projects signed up by Google probably will cost taxpayers between $370 million and $417 million for the production tax credits received by the “wind farm” owners over the first 10 years of each of the projects’ operation.
Summary
One big winner in the Google purchase of wind-generated electricity from three “wind farms” would be Google because of all the favorable press attention. The other big winners will be the project owners because of the lucrative tax breaks.
The big losers will be taxpayers who must pick up the tax burden escaped by the owners or, perhaps more accurately, their children and grandchildren who will inherit the huge and growing national debt, now about $17 trillion—summing to more than $50,000 per U.S. citizen.
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