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Tax Credit Extension Helps, But Oklahoma Wind Industry Still Wounded by Uncertainty

Filed by KOSU News in State Impact.
January 4, 2013

Joe Wertz / StateImpact Oklahoma

A wind farm in Ellis County, Okla.

The final so-called “fiscal cliff” negotiations included a bill that renewed a federal tax incentive that gives wind energy producers a 2.2 cent per kilowatt hour tax credit.

Uncertainty over the incentive’s renewal has been cited in manufacturing slowdowns and job cuts, including 167 job losses at a Tulsa wind tower manufacturer. Oklahoma wind developers scrambled to meet service deadlines before the end of 2012, The Oklahoman’s Paul Monies reports.

The one-year extension will help Oklahoma’s wind industry — especially stalled projects — but isn’t likely to restore job losses or spur significant new wind projects, according to the paper:

“ … many companies have developments that they have time invested in and they’re going to all try to turn those into power contracts or other opportunities to sell from those sites and get them into construction,” Steve Wolfgram, vice president of Competitive Power Ventures Inc., tells The Oklahoman. “That’s going to be a challenge, but this is good news. It’s a help, but it’s not a long-term solution.”

Prior to the tax credit’s extension, wind energy developers were required to be producing electricity by the end of 2012. But the language of the tax credit changed when it was extended, Kylah McNabb, wind development specialist with the state Commerce Department, tells The Oklahoman:

Projects now just have to be under construction by the end of year.

“I think the change in the language allowing construction to start in 2013 offers a wealth of opportunity. I think you will see more projects go online than with the traditional wording of the tax credit.”

Long-term certainty is key, even if it ultimately means the elimination of the tax credit, the paper reports:

After spending much of 2012 asking Congress for a long-term extension of the tax credit, the association said in December a phaseout could give the industry some certainty. The American Wind Energy Association proposed continuing the credit at 100 percent for 2013. It would then fall by 10 percentage points each year until it hits 60 percent in 2017 and 2018. The credit would end in 2019.

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