Pacific Swell

Southern California environment news and trends

Fiscal cliff final package extends production tax credit for wind energy

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As lawmakers in Washington worked to avoid the fiscal cliff, wind producers in California expressed concern about what a budget resolution might deliver.

On Sunday, Greg Wetstone of Terra-Gen Power told me, "Industries across the country are waiting to hear to know what is in fact going to be the tax environment for them next year which is a pretty crazy situation."

Terra-Gen developed the Alta wind energy center in Kern County’s Tehachapi mountains  - the largest in the United States. Wetstone says it’s responsible for hundreds of permanent operation and maintenance jobs and thousands more workers in construction and manufacturing.

A federal wind production tax credit aided the project’s growth. But it ended with calendar year 2012. Wetstone says the unpredictability of the credit has stalled the industry. But as we fell off the fiscal cliff, Wetstone still held out hope. 

"Companies have mostly been very careful about how much they’ve invested and where they’ve gone," he said on December 30. "So we’re prepared to go forward as quickly as possible once the credit is extended if that happens."

Wetstone told me that even if the federal credit died, wind could still come on line in states that offer their own incentives for production.  California does not. 

It appears the lobbying worked. The package Congress passed includes a production tax credit for wind, extended through 2013, that extends the credit not just to projects that are operational in the next 12 months, but also to projects that begin construction during that period. 

It's not just guys like Greg Wetstone celebrating. Sierra Club Executive Director Michael Brune released a statement:

“Over the past year, the Sierra Club has worked with thousands of grassroots activists across the country to hold their members of Congress accountable for their failure to prevent wind worker layoffs in their hometowns. We are pleased that this latest barrier to protecting clean energy jobs in America has been overcome, and we will continue our work to ensure that our nation creates jobs and a secure climate future with clean energy.”

The credit stays off the chopping block for another year. It's not the first time this has happened. But this might be the strongest connection the wind industry has made to jobs and economic development in a present, existing, this-industry-is-up-and-running sense. So this is your big opportunity, wind.

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