As expiration of PTC nears, two major Pennsylvania wind farm projects cancelled

With business uncertainty spiking in the wind power industry as the year-end expiration of the federal wind energy Production Tax Credit (PTC) draws closer, two planned wind farms in Pennsylvania have been cancelled, the Pittsburgh Post-Gazette reported yesterday.

Wind farm projects typically have a much shorter construction time than other types of energy projects, but the fact that Congress has not yet acted to extend the PTC is casting a shadow that has already resulted in layoffs at some supplier companies of long-lead-time components and is now affecting decisions on whether to go forward with projects.

The Post-Gazette story by John Beale quoted Paul Copleman, a spokesman for Iberdrola Renewables, as saying his company will not build the projects: "We’re focusing on operation of existing wind power in 2012 rather than new building due to low energy demands and an uncertain regulatory landscape … The tax credits are a big part of it. They drive job creation and remain a critical component of our development efforts in the U.S."

The proposed wind farms affected are one with 24 wind turbines slated for Bedford County and a second with 40 machines that would have been built in Clearfield County.

The PTC provides an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from utility-scale turbines. It is set to expire on Dec. 31 unless Congress extends it first. A recent study by Navigant Consulting found that extending the Production Tax Credit will allow the industry to grow to 100,000 jobs in just four years, while an expiration would kill 37,000 jobs within a year.

A House bill seeking to extend the PTC has 97 cosponsors, including 22 Republicans, while a Senate bill to extend it was introduced March 15 by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S. A PTC extension has been endorsed by a number of newspapers across the country, including the Houston Chronicle, The New York Times, the Denver Post, the Daily Oklahoman, and the Toledo Blade.

Tom Gray,