Gazette opinion: Keep tax credit that spurs wind energy growth

2012-11-25T00:05:00Z Gazette opinion: Keep tax credit that spurs wind energy growth The Billings Gazette
November 25, 2012 12:05 am

When businesses harness Montana’s wind energy, private landowners, local and state governments and workers share the benefits.

More than a dozen wind farms scattered across Montana have a total electricity generating capacity of 647 megawatts. They represent $1.3 billion in capital investment, creation of 1,319 construction jobs and 86 permanent jobs. Together, they paid $5.4 million in taxes in 2010. By 2018, these same wind farms will be paying $8.9 million in property taxes as abatements expire.

Wind farms are helping Montana utilities, including NorthWestern Energy, meet a state law requirement that 15 percent of energy supplied will be from renewable sources by 2015. And recent wind contracts are keeping costs down for ratepayers.

Montana wind farms are producing energy at competitive prices. Their pricing reflects the federal Production Tax Credit that has boosted U.S. wind energy capacity from 1.5 gigawatts in 1992 to 45 gigawatts in 2011.

Despite that growth, wind still has a small slice of the U.S. energy market. By the end of last year, wind generated about 3 percent of the nation’s electricity supply, according to the Energy Information Administration.

The U.S. government has long subsidized domestic energy production. The production tax credit for wind utilities is part of that effort to ensure that business will produce the energy America needs at home.

The tax credit spurred investment in recent years as wind technology has advanced and increased efficiency and productivity. However, the tax credit is scheduled to expire Dec. 31.

With no tax credit, Montana is unlikely to see more new projects like the Musselshell Wind Farm, two 10-megawatt projects which started construction last month near Shawmut. The credit will pay 2.2 cents per kilowatt generated by the wind farm for its first 10 years of operation.

Strong bipartisan support

Back in August, the Senate Finance Committee, chaired by Sen. Max Baucus, D-Mont., approved a tax bill that would extend the wind production credit until the end of 2013. (The committee bill also would have let other tax breaks expire.) Baucus’ partner in moving that legislation was none other that Sen. Orrin Hatch, R-Utah. The bill won bipartisan committee approval on a vote of 19 to 5. More recently, both Republic senators from Kansas and the state’s Republican governor have called on Congress to extend the wind production tax credit. Kansas is a windy state, and its leaders see the value in tapping that natural resource.

Montana ranks third among the states in wind energy potential. Most of that potential has yet to be tapped.

“Wind means income for our farmers and revenue for our schools and roads,” Baucus noted on his visit to the Mussellshell Wind Farm site. “It was the production tax credit that has helped finance wind farms across central Montana from Shelby to Judith Gap and now Shamut. And together those wind farms have supported 1,500 jobs and brought more than $1.5 billion investment to Montana.”

Dec. 31 deadline

Every member of the state’s congressional delegation has supported the wind production tax credit, including Sen. Jon Tester and Rep. Denny Rehberg.

We call on Montana’s delegation to champion the business tax credit that is putting money into our state in areas that don’t have a lot of other energy development. The production tax credit extension ought to be part of the year-end legislative deal.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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