Maine wind power supporters are touting the industry’s economic impact ahead of the legislative session.
Wind power companies have spent more than $532 million on projects in Maine over the past eight years and are poised to spend an additional $745 million over the next four, an industry trade group said Tuesday in a report summarizing the economic impact of wind energy in the state between 2006 and 2018.
Fourteen utility-scale wind power projects built or under construction have a total generation capacity of 614 megawatts, the report said. That capacity could serve more than 200,000 homes, based on regional demand and rated output. Projects planned over the next few years could more than double the capacity.
A report Tuesday by the Maine Center for Business & Economic Research at the University of Southern Maine says the industry will produce 4,200 jobs in 2015 and that the industry is poised to double over the next four years to 1,300 megawatts of power output.
In addition, these projects scattered across nine counties are creating an average of 1,560 jobs a year, mostly in construction, but also in services across the state that help support the workers and the job sites.
The report was commissioned by the Wind For Maine advocacy group, made up of developers, businesses and residents. It was done by Charles Colgan, an economist and University of Southern Maine professor, and was presented Tuesday at a Portland news conference.
Taken together, the report outlines the benefits of Maine’s wind energy industry, which has grown steadily since 2006, when the first turbines were erected at Mars Hill in Aroostook County.
By releasing it now, the industry and its allies are seeking to highlight the attributes of wind power, at a time when rising electric rates and political opposition to tax and ratepayer subsidies are placing wind under closer scrutiny.
In Maine, a new Legislature is set to convene that features Republican leaders who are less friendly to wind power than some of their Democratic colleagues. One contention among Republicans is that subsidies for renewable energy, including wind, are contributing to higher electric rates. That charge is refuted by the industry.
The report also is being released as a new Congress will be asked to extend a key tax benefit for the wind industry nationally, called the Production Tax Credit. It awards a 2.3 cent credit for each kilowatt hour a wind farm produces for 10 years. Congress has declined to expand the credit for multiple years, leading to annual battles over the costs and benefits of the program. Last month, Congress extended the credit for a few weeks before heading home for the holidays.
In a broad sense, the report contends that any taxpayer or ratepayer costs associated with wind power development are far outweighed in Maine by the $1.28 billion in investment and spending created over the 12-year study period.
“We think it’s an important part of the public policy debate,” said Jeremy Payne, executive director of the Maine Renewable Energy Association. “What other industry is providing this level of investment?”
But Chris O’Neil, a spokesman for the anti-wind group Friends of Maine’s Mountains, said the investment figures represent only one side of the ledger.
“A lay reader of this report might believe that benevolent wind developers are pouring billions of dollars into the pockets of Maine people,” O’Neil said. “But the reality is that every penny spent on wind infrastructure is coming out of either our ratepayer pocket or our taxpayer pocket. The report mentions the income but not the out-go.”
With its sparsely populated, forested ridgelines, Maine has emerged as the leading site for onshore wind power in New England. Development here has been driven by policies in Massachusetts and Connecticut that require utilities to get sizable percentages of their power supply from renewable sources, even if it costs more than market rates. The goal is to reduce the region’s dependence on fossil fuels, which contribute to air pollution and climate change.
But despite surveys that show widespread support for wind power in Maine, vocal opposition continues to come from residents living near the wind farms. Complaints range from the visible impact of 500-foot high turbine towers to health symptoms attributed to the sounds emitted from the spinning blades.
Now a new area of disagreement also is forming over electric rates.
The shortage of pipeline capacity in New England is pinching winter supplies of natural gas, which fuels half the region’s power generation. That’s sending rates soaring this year for homes and businesses, and prompting politicians to react.
Senate President Michael Thibodeau, a Republican from Waldo County, is preparing a bill aimed at reducing subsidies for renewable energy projects, including wind farms. He estimates that Mainers are paying an extra $60 million a year in higher rates to support renewable energy. In his view, rates have increased to the point where the industry shouldn’t be receiving excess premiums.
“I encourage and welcome the jobs they create and the investment they make,” Thibodeau said. “But shouldn’t there be a trigger point where they don’t need a subsidy?”
Payne, however, said he doesn’t understand Thibodeau’s figures. The Maine-specific subsidies for renewable energy projects largely go to biomass power plants and wood boilers at paper mills, he said. Wind gets a small fraction of what Thibodeau claims, he said.
Wind actually could help lower rates over time, Payne said. Because wind has no fuel cost, it could become a hedge against natural gas volatility, when enough wind comes online to influence market prices.
Payne also indicated that it’s notable for Republican leaders to target subsidies for wind when they are supporting a proposal being studied at the Maine Public Utilities Commission to charge ratepayers up to $75 million a year to help expand natural gas pipeline capacity.
“We pick winners and losers all the time in state policy,” he said.
Gas pipeline expansion is a priority of Gov. Paul LePage as a path to lower electric rates. His energy director, Patrick Woodcock, said the relationship between natural gas and wind is complicated. Because wind farms can’t operate on predictable schedules, he said, their growth may force gas-fired plants to power down when the wind blows, and deter them from buying firm fuel contracts that could lower generation costs.
Woodcock said the governor appreciates the construction activity, but would like to see wind developers bring more manufacturing and assembly jobs to the state. All the towers and turbines, which account for more than half of wind development costs, are shipped from out of state or overseas.
Study author Charles Colgan says the projected investment of $1.3 billion from 2006 through 2018 is helping rural parts of Maine that needed it most.
The report was commissioned by Wind for Maine and the Maine Renewable Energy Association. Wind for Maine spokesman David Farmer says it’s important to quantify the economic benefits to counter skeptics including Gov. Paul LePage.