Posts Tagged ‘wind’

Climate Parents | Senator Wyden: Restore support for wind power!

I just signed a letter calling on U.S. Senator Ron Wyden and Congress to renew the vital tax credit for wind and other sources of renewable energy. The Production Tax Credit (PTC) helps wind energy compete with highly subsidized fossil fuel industries, attracts investors for new wind projects, fosters innovation and employs tens of thousands of Americans in the clean energy economy.

Because of wind energy’s growing success, dirty energy billionaires, like the Koch brothers, campaigned to kill the renewable energy credit program. Congress is at a crossroads.

Will they support policies and industries that increase carbon pollution, fueling climate-related disasters? Or will they take action to promote safe, clean energy that will allow us to stabilize the climate?

As incoming Chairman of the Finance Committee, Senator Wyden will play a major role in deciding which direction Congress goes.

Please join me in telling Senator Wyden to renew the renewable energy tax credit now: http://act.engagementlab.org/sign/wind-credit_Wyden/?referring_akid=.227975.zAnFDm&source=taf

By signing the letter, you will send a message the future of our kids and and the stability of our climate are priorities that deserve urgent attention. Thank you for taking action!

PLEASE SIGN THE PETITION via Climate Parents | Senator Wyden: Restore support for wind power!.

North American Windpower: Congress Wades Into Alphabet Soup Of Wind Tax Incentives

Congress recently provided the wind industry fodder for speculation regarding the future of renewable energy tax incentives. Below is a discussion of the modified accelerated cost recovery system (MACRS) depreciation news, followed by a discussion of the future of production tax credits (PTCs) and the possibility of extending master limited partnership (MLP) status to renewable energy projects.

First, Sen. Max Baucus, D-Mont., who chairs the Finance Committee, released his outline of corporate tax reform. His proposal is intended to achieve a lower corporate tax rate (the exact rate remains to be specified) but sacrifice MACRS.

Under the proposal, a wind farm would be depreciated 5% a year using a declining balance calculation, meaning 5% in the first year, 4.75% (i.e., 5% of 95%) in the second, and so on. This is drastically less accelerated than the current depreciation over five years, using a 200% declining balance. Further, as compared to the 50% “bonus” depreciation that is available for projects in service this year, it is a drop in the bucket.

The value of MACRS in a wind tax equity transaction varies between 10% and 30% of the tax equity investor’s economics. (The range is due to the varying cost of funds of different investors and varying tax appetite assumptions.) Sen. Baucus’ proposed depreciation methodology would wipe out that benefit.

In an apparent effort to avoid triggering heart attacks throughout the industry, the senator’s proposal has a reference to “considering improving and making permanent the energy tax credits set to expire in 2013.” The statement appears to be referring to the PTC. (The 30% investment tax credit (ITC) for solar does not expire until the end of 2016, but it would be surprising if the proposal only addressed PTCs.)

The wind industry must wait until Baucus releases the summary of tax reform provisions related to energy to know what the senator has in store for the PTC.

The likelihood that the proposal to expand MLP rules to include renewable energy projects as part of tax reform increased when the Joint Committee on Taxation “scored” the proposal in the Master Limited Partnership Parity Act (S.795) as costing a modest $1.3 billion over the 10-year scoring period.

In the context of tax reform, $1.3 billion is a low amount. For instance, replacing MACRS raises an estimated $500 billion. Further, the last time the PTC was extended for just one more year, it was scored as costing $12 billion. Thus, the MLP expansion is little more than a rounding error in tax reform.

The benefit of MLP status is being able to raise equity from the public while only incurring a single layer of tax. That tax is imposed at the unit holder level only. Under current law, MLPs cannot effectively pass-through tax credits or tax deductions (e.g., depreciation) in excess of their income to individual investors, and no proposal has been introduced to modify those limitations.

Therefore, the proposed MLP change does not eliminate the need for tax equity investors or address the shortage thereof. What the MLP change would do is permit “sponsor” equity to be raised from retail investors and create a secondary market for projects that are beyond the tax credit period.

The MLP legislation has bi-partisan support. Besides Sen. Chris Coons, D-Del., who reintroduced the bill in April, supporters include Sens. Mary Landrieu, D-La., and Debbie Stabenow, D-Mich. On the Republican side, supporters include Susan Collins, R-Maine, Jerry Moran, R-Kan., and Lisa Murkowski, R-Alaska.

A similar bill was introduced in the House in August by Rep. Mike Thompson, D-Calif., and was co-sponsored by 18 other Democratic House members. In addition, the White House appears to support the proposal.

The MLP expansion also has some odd allies when it comes to trade associations. For example, the proposal has been endorsed by the American Petroleum Institute (API). There are two potential rationales for that support. The first is that API may believe that the MLP rules are less likely to be a sacrificial lamb in the tax reform process if the renewables industry is also a beneficiary of the rules. The second is that API may hope to couch the expansion of the MLP rules as a trade for allowing the PTC and ITC to expire.

For that reason, the support from the renewable energy trade associations has been somewhat tepid. They would like to see the MLP rules expanded but not at the expense of tax credits. The financial benefit of the MLP rule expansion is a fraction of the value of the tax credits.

There has not been an analysis prepared yet that compares the value of the MLP expansion to the value of MACRS.

However, if Baucus carries through on the suggestion that he would improve and make permanent the PTC and that is combined with an expansion of the MLP rules, it would constitute a proposal that would merit careful analysis by the wind industry. It would be a novel experience for wind developers to be able to make long-term plans that do not have to account for the possibility that the PTC may lapse.

David K. Burton is partner at law firm Akin Gump Strauss Hauer & Feld. He can be reached at (212) 872-1068 or dburton©akingump.com

via North American Windpower: Congress Wades Into Alphabet Soup Of Wind Tax Incentives.

WINData LLC

WINData, LLC is a veteran engineering company providing professional project and site development services to the wind industry. WINData’s wind project work comprises over 15 GW of wind farms and conceptual developments ranging from pre-developed to late stage developed sites across the western US.

WINData’s pioneering work in the 1990’s and early 2000’s contributed significantly to the wind energy projects on the Blackfeet reservation, Cut Bank/Ethridge and Judith Gap in Montana; the Columbia River Gorge in Washington and Oregon and in Casper Wyoming

WINData offers a full range of wind energy consulting services for resource selection, siting and analysis of site potential. Our wind energy consultants have been in the siting business since 1991 and have been involved in every aspect of the business from initial land owner relations to negotiations with power off-takers.

WINData offers the following comprehensive professional services to clients on an “out-sourced” basis:

Utility and energy business technical team leadership

Identification and origination of wind development opportunities

Project scoping, development strategy and bid formulation

Technical team assembly, leadership and management

Wind resource assessment and meteorological science

Wind project micro-siting, project design and output modeling

Conducting meetings with land owners, communities, Utilities, stakeholders, governmental agencies and tribes

Contract and agreement formulation, negotiation and execution

Technical writing and presentations

via WINData LLC.

Wind farm breaks ground: Completion of $19M project near Choteau expected in June of 2014 | Great Falls Tribune | greatfallstribune.com

Groundbreaking has begun on a new wind farm that will soon rise above the wheat fields of Teton County.

When completed, the $19 million Fairfield Wind project will include six utility scale turbines standing 398-feet tall, with a combined total of 10 mega watts of generating capacity.

“It has broken ground, and we expect to complete commissioning by June of 2014,” said John Pimental, president of Foundation Windpower, a wind energy engineering and development company based in the San Francisco Bay area.

The Fairfield Wind project is jointly owned by Foundation Windpower and WINData, a wind energy consulting and project management firm located in Great Falls. The general construction contractor for the project is Dick Anderson Construction, also of Great Falls.

During construction, the project is expected to employ 50 to 60 workers. Foundation Windpower has already inked a power purchase agreement with NorthWestern Energy, which will begin accepting electricity from the turbines in 2014.

Fairfield Wind may have the distinction of being one of the last wind energy projects initiated in Montana under the federal Production Tax Credit (PTC) program. Enacted in 1992, the PTC program encourages investment in renewable energy by lowering an energy development company’s overall tax liability.

As currently structured, the PTC offers 2.3 cents in tax offsets per kilowatt of electricity generated to owners of new wind energy facilities. Credits are offered for the first 10 years that a wind energy facility is in operation. Proponents of the program argue that investment in renewable energy would be negligible without these types of government incentives.

According to the U.S. Department of Energy, wind energy now constitutes 3.91 percent of total energy generation in the United States, up from 0.27 percent 10 years earlier.

Critics of the PTC argue the federal government should not be in the business of picking winners and losers in the energy industry, and that wind energy is less economical than other sources of electricity.

The PTC was scheduled to expire at the end of 2012, but Congress extended the tax credits for another year as part of the fiscal cliff legislation.

The program is expected to hand out $12.1 billion in tax credits to the wind industry over the next 10 years.

Foundation Windpower and WINData will be able to take advantage of PTC because construction on the project began prior to the Dec. 31 program deadline.

“The rules require construction to start in 2013, but the project can be completed in 2014 and perhaps later,” Pimental said. “We organized the construction schedule to allow us to start this year.”

Pimental said selection of the wind farm site on the Bole Bench, east of Freezeout Lake between Fairfield and Choteau, was based upon several factors including the wind resource, proximity to existing transmission lines and the ability to minimize the biological and habitat impacts.

“Every wind project looks at those three factors,” he said.

Teton County Commissioner Joe Dellwo said the county wholeheartedly endorses the Fairfield Wind project. On Oct. 3, commissioners granted three county road encroachment permits to allow the general construction contractor to improve road access to the development site.

“It’s a no-brainer for us because it’s going to increase the tax base,” Dellwo said. “They’re moving dirt as we speak. I think their plan is to begin pouring cement in November. They’re going to be well underway by next month.”

According to Pimental, similar wind power production products could become a rarity if Congress declines to extend the PTC beyond the 2013 deadline.

“We certainly think it would be wise public policy to extend those tax credits,” Pimental said. “They are an important consideration for developers who put time, money and risk into trying to develop these projects. Without those supporting subsidies, renewable energy project development would come to a grinding halt in America.”

via Wind farm breaks ground: Completion of $19M project near Choteau expected in June of 2014 | Great Falls Tribune | greatfallstribune.com.

Wind farm breaks ground: Completion of $19M project near Choteau expected in June of 2014 | Great Falls Tribune | greatfallstribune.com

Wind farm breaks ground: Completion of $19M project near Choteau expected in June of 2014 | Great Falls Tribune | greatfallstribune.com.

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