Feds may pull the plug on windfarms subsidy by year’s end
But some of the fuel that has kept the blades turning could run out of juice by the end of the year.
The wind farm industry has been thriving for a number of years because of a federal subsidy program called the Production Tax Credit.
Under it, a wind farm company get 2 cents for every kilowatt hour of power produced.
But the legislation, enacted in 1992, will expire in Dec. 31, unless Congress renews it as it has done seven times, according to reports.
Duke Energy, a North Carolina-based company, is building one of the two wind farms in this county.
The other, which is near completion, is a project of E-On Climates & Renewables.
E-On’s $250 million project will produce 200 megawatts of power.
But as the two companies get ready to go commercial, their turbines might be turning against the wind.
Milton R. Howard, vice president of wind development with Duke in Houston, said the federal Production Tax Credit is a big deal for the industry.
“One of the debates is if it will be extended or not,” he said. “Hopefully, it will be extended so we can continue developing wind energy projects.”
If not, Howard said close to 90 percent of the wind power production will be impacted nationwide .
Companies such as Vestas of Colorado and others that make towers, cells and the blades for the turbines will feel the full impact if the federal subsidy program ends at the end of the year.
Howard said that will force companies to implement layoffs on all sort of scales and plant closings.
Duke Energy, for instance, has close to a dozen wind farm in the country, three of which are in Texas already delivering wind generated power.
They are the Sweetwater Windpower Project in Noland County, which has 392 turbines and produces 583 mw of wind power.
A second one is the Notrees Windpower Project in Hector and Winkler counties. It has 95 turbines and produces 153 mw of power.
The third one is the Ocotillo Windpower Project in Howard County with 28 turbines, producing 58.8 mw of power.
The wind farm Duke Energy will have in Willacy County is the largest such project the company contracted to build in 2012.
Wind power, as the words say, is based on how fast the wind blows.
Simply said, if there is no wind there is no power generated.
But industry experts study the wind patterns before picking a place to build a wind farm.
Howard said they have done studies that demonstrate when the wind will blow.
He said wind power is pretty competitive with other power generators like natural gas.
“The turbine technology has come a long way and has become more efficient in the last couple of years,” Howard said. “It will be frightening for the industry if the federal Production Tax Credit is not extended.”
Howard said that about 125 people were hired from the local labor force.
E-On, a Chicago-based company, is about to complete its Willacy County project.
In fact, the company will add the Willacy County project to its portfolio this month when it will officially inaugurate the plant on Aug. 23.
The two companies came aggressively earlier this year each holding a job fair that drew hundred of applicants.
E-On hired up to 14 people according to figures provided by the Economic Development Corp. of Raymondville.
Duke is in the midst of its project and the subcontractor the company has is employing about 125 workers, each making wages of $15 to more than $20 an hour.
Kevin Gresham, a spokesman with E-On in Austin, said their project in Willacy County is moving on schedule.
Asked about the federal Production Tax Credit, he said, “ “It does expire at the end of the year, but we hope Congress will extend it.”
Gresham said E-On is planning to build a permanent office here, but did know how soon.
He said the company has several wind farms in West Texas and Los Papalotes I in Nueces County.
The wind farm here is called Magic Valley Wind Farm.
Meanwhile, industry experts said that if the federal Production Tax Credit is not extended after December 31, its effects will be felt at all levels of the industry.
A campaign ad paid for the environmental organization, the Sierra Club, is reminding U.S. Rep. Blake Farenthold how vital the wind farm industry is for jobs and the environment.
The Sierra Club said that up to 75,000 jobs, 9,000 of which are in Texas alone will be lost, if the federal subsidy program is not extended by the end of the year.
“With Americans working hard to make ends meet during this tough economy, 37,000 pink slips is the last thing working families need,” Michael Brune, executive director of the Sierra Club, said. “Manufacturing jobs are at risk in Texas and Rep. Farenthold must act now to renew the production tax credit and protect American workers.”
According to the organization, wind power has quickly become one of the most important energy sources for the country, especially in Texas which generates more wind power than any other state.
“Representative Farenthold has the chance to be a job creator, but he is just sitting by as jobs in the wind industry are lost due to inaction,” Brune said. “Maybe he doesn’t care.”
Farenthold said he is not against the wind farm industry, but against giving subsidies per se.
“Right now the wind power industry is getting a huge tax credit,” he said. “That is taxpayers’ money. I think they should be treated like anyone else.”