A federal clock is ticking on an ambitious Texas Public Utility Commission plan to build transmission lines to funnel wind energy from West Texas to metropolitan areas. The wind energy industry revolves around a production tax credit that expires Dec. 31. After more than one false start, there is no guarantee Congress will extend it. Expansion will halt, some warn, if lawmakers don't take action this summer. "We don't want lines to just be standing out there," Sweetwater Mayor Greg Wortham said of the planned transmission lines. Wortham is also director of the West Texas Energy Consortium. Until a turbine is producing juice -- no credit.

Pecos County Commissioner for Precinct 3 Jay Kent speculated aloud about how much money the county was losing, but after a discussion the Commissioners Court approved unanimously Monday a tax abatement for the Sherbino II Wind Farm LLC, a development venture of British Petroleum Alternative Energy. The court approved the agreement with amendments. One removes a clause that requires an invoice be sent to BP each year, placing the onus for payment by Jan. 31 of each year of the abatement upon BP; the second specifies a public notice to other taxing entities.

Wind is always available and it doesn't pollute the planet. But as wonderful as it sounds, using the resource for energy could come with a hefty price tag. ...But there's a big problem. The Texas Public Utility Commission [PUC] hasn't approved a way to funnel all the power from the wind farms in West Texas and eventually the panhandle, into the Dallas/Fort Worth area. Ross points out, "The only impediment we have right now is the construction of transmission lines. We've got to construct the wires to move the power back to Dallas/Fort Worth." According to the PUC, that could cost at least $1 million per mile to get the power into the local area.

The Highland Independent School District learned earlier this month that it is a property wealthy district after being notified of its status by the Texas Education Agency. In TEA terms, Highland is a Chapter 41 district for the 2008-09 school year. Chapter 41 of the Texas Education Code makes provisions for certain school districts to share their local tax revenue with other school districts. ... The Highland ISD has been declared a Chapter 41 district because of significant increases in property values due to the new wind farms in the district. Nelson said those wind farm values will peak in the 2008-09 school year and then decline due to tax code Chapter 313 property tax limitation agreements ...

Maverick oilman T. Boone Pickens' plan for a mammoth wind farm in the Texas Panhandle is a $2 billion bet that Congress will extend a tax credit critical to the environmentally friendly industry. ...But the [wind] industry has relied on federal tax credits to survive, a point Pickens made Thursday. "I believe that Congress will recognize that it is critical not only to this project, but to renewable energy in this country, that they enact a long-term extension of the Production Tax Credits," he said.

Released Tuesday, the 443-page Energy Report 2008 shows state and local subsidies of $1.4 billion on energy produced in Texas, plus a similar amount of federal subsidies for Texas energy. ...[Texas Comptroller Susan] Combs said Tuesday that subsidies can have unintended consequences -- especially when policymakers favor "winners" by providing greater subsidies for one fuel source over another. "Such assistance must be applied carefully," the report says. "Public policies that attempt to pick winners in the race for new energy technologies are an inefficient way to achieve policy goals and run the risk not only of wasting taxpayer money but also of directing private investment away from more promising use."

Two area wind energy opponents filed a lawsuit Monday against the Taylor County Commissioners Court for granting what the plaintiffs say are illegal tax abatements to wind farms developed within the county. According to the lawsuit, wind energy equipment is not eligible for tax abatements under the state tax code. In 2004 and 2006, Taylor County commissioners granted five tax abatements potentially worth $5 million to $10 million to three companies that have built farms of wind turbines in rural areas of the county. "That's my money the county is giving away illegally. We're asking the court to rectify this," said Dale Rankin, one of two plaintiffs in the lawsuit.

The Texas attorney general is looking at tax breaks for wind farms, and early signs are he doesn't think the law allows them. "Fixtures and improvements owned by the wind turbine company as personal property would not be 'real property' that may be the subject of a tax-abatement agreement," according to a legal opinion issued by Attorney General Greg Abbott on Jan. 29. The wind industry wants a another chance. "We have asked the attorney general to review it and take a second look," said Paul Sadler, executive director of The Wind Coalition. "If they will not, it may be necessary to tweak it in the next legislative session."

Hooking up the state's largest cities to rapidly expanding wind power projects in West Texas could cost as much as $6.3 billion in the coming years, the state's grid operator says. In a report this week to the state Public Utility Commission, the Electric Reliability Council of Texas, which oversees most of the state's power grid, listed five options for getting wind-generated electricity to the populous areas that need it. Even the least ambitious would cost almost $3 billion. Texas is the largest wind power producer in the country, with more than 4,400 megawatts of capacity installed — about 2 percent of the state's total power capacity, according to the American Wind Energy Association.

GE Energy Financial Services, which invests in energy projects, expects to finish two new wind farms in Texas and Illinois by the third quarter of this year, ahead of any potential tax credit expiration. GE is developing the projects with Invenergy Wind LLC. The farm in Texas, east of Lubbock, will have 100 wind turbines for capacity of 150 megawatts. Mr. Howell declined to say how much the project will cost. Wind developers who can't finish their projects this year could face a second problem. Global demand for wind turbines is so hot that developers must order the equipment months in advance.

The Senate has yet to take up House Resolution 5351, the energy bill approved in the House in late February. "We narrowly defeated it a year ago," Mills said. "But we think we have the votes right now in the Senate to keep it from becoming law." The bill's funding of tax incentives for green energy -- such as the wind energy production tax credit -- with $18 billion of taxes on big oil has failed to win any support from U.S. Sen. John Cornyn, R-Texas, who said he supports wind energy production tax credits but doesn't like the way the bill pays for them. "Our friends on the other side of the aisle feel like they have to raise taxes in order to do it," Cornyn said. "My preference would be to cut out some of the wasteful programs in the federal government and use that savings to pay for those tax credits."

An opinion recently issued by the Texas Attorney General appears to call into question the ability of county governments to grant property tax abatements for wind energy generation equipment. ...citing case law, the opinion observes that "[f]ixtures and improvements owned by the owner of real property are also real property, but ordinarily improvements owned by a lessee of real property are personalty." Therefore, the opinion concludes that since the fixtures and improvements in the situation at hand were owned by the developer and not the land owner, the improvements are personalty and are not eligible for an abatement under Section 312.402(a).

Four speakers took turns explaining adverse consequences of life with wind farms Tuesday at a Brownwood Area Chamber of Commerce luncheon that focused on the downside of turbines. ...Burns said through six generations, his family has endured drought, declining economic farm conditions and other adversities, but they've always known that "if you work hard, you can tough it out. The land restores you. The land's beauty is its primary value, but all of the property in Brown County is being threatened. Someone else will make the decisions about our land, and it can never be reversed if (the decisions) are wrong." Brown County resident Dr. John Dunn said county government can't prevent wind turbines from being placed on property where owners allow it, but it can choose not to allow tax abatements to encourage their placement.

For a company proposing a large 160 megawatt wind farm project in Andrews and Ector counties, it's one down and six to go. The Andrews County Commissioners Court on Monday unanimously approved a tax abatement proposal from 2W Wind, LLC that provides financial incentive to locate here, county officials said. Monday's tax abatement approval was the first between 2W Wind, LLC and seven participating governmental entities. It came after executive session deliberations during last week's commissioner's court meeting, Andrews County Judge Richard Dolgener said. The court had previously designated land for the proposed $336-million wind project as a reinvestment zone in October.

Jasper County first advertised for bids to develop a wind power project in July of 2002. The county received two bids, one from Pecos Renewable Energy (PRE) and one from RES North America. After review and recommendation by the county's attorneys Mark Morgan and Thane Adkins, the court unanimously voted on Oct. 23, 2002, to accept PRE's bid. Five years ago wind energy was a relatively new enterprise to Texans, but in 2006 Texas surpassed California to become the nation's leader in wind capacity. ...If PRE can prove they have met the milestones of the contract, they may co-develop a wind farm with their named collaborator, Suzlon Wind Energy, the fifth-leading wind turbine supplier in the world. Or they can flip their lease and sell to another energy company, in which case Jasper County would receive royalties as development occurs. But unless the contract is terminated and Jasper has an opportunity to seek a new energy partner, PRE has the county's hands tied for the next 25 years (with automatic renewal for 10 more years) with no contractual obligation to produce anything.

Austin Energy has relied almost entirely on wind to propel its march toward the city's renewable power goal. But to ensure reliability and affordability, Austin Energy will need to diversify its portfolio beyond wind to reach its goal of getting one-third of its electricity from renewables by 2020, said Michael McCluskey, the utility's deputy general manager. ...The Electric Reliability Council of Texas, which operates the electric grid for most of the state, has determined that only 8.7 percent of the state's installed wind capacity can be relied on in periods of peak demand. So to ensure that the lights - and air conditioners - stay on during hot summer afternoons, utilities must have backup conventional power sources, such as natural gas, that can be turned on quickly, said Bill Bojorquez, ERCOT vice president of system planning.

Though corporate spokesmen say they will not formally present them to the Cooke County Commissioners Court, FPL Energy recently collected about 1,000 signed petitions favoring a proposed development of 60-100 industrial wind generators in northwest Cooke and northeastern Montague counties. “There is a petition — the purpose of which was to show the county commissioners that, despite what they hear from a handful of vocal opponents, there is strong support among their constituents for the wind project,” said Mary Wells, a spokesperson for FPL Energy, a division of FPL Group which also owns Florida Power and Light and about 50 wind farms in the nation. “In two days, more than 1,000 signatures were gathered.” ...On Nov. 26 the Cooke County Commissioners Court took no action to grant or deny FPL Energy an abatement of county taxes for about 10,200 acres in western Cooke County north of Muenster where the generators would be situated.

Boone Pickens wants some help building his wind farm, and he's asking taxpayers to provide it. The Gray County Commissioners Court approved a reinvestment zone Friday to cover the northern one third of the county. "It's not just for Mesa Power," said County Judge Richard Peet. But Mesa has asked four other counties to do the same thing. The company has also asked for tax abatements for the sizeable wind farm it wants to build. At 4,000 megawatts, it would be the world's largest. That would be five times the size of Horse Hollow, a 735-megawatt installation near Abilene that currently is the largest.

Lack of action on a tax abatement for a company looking to build a series of wind generators in western Cooke and eastern Montague counties could send the alternative energy project to other counties, a spokesman said Monday. The Cooke County Commissioners Court took no action in its Monday meeting to give or deny Florida Power and Light a tax abatement for a series of gargantuan wind-powered electric generators on about 10,000 acres in western Cooke County. ...“The lack of action will probably kill this deal, and we’ll now have to reconsider our investment in Cooke County,” Edwin Giraldo, project manager for Florida Power and Light, said in an interview following the meeting. ...“The bottom line is that there is opposition to the windfarm, regardless of the benefits it would provide,” he said.

Currently, six wind energy companies are negotiating contracts with Howard County school districts that will allow them to pay reduced property taxes for about eight years, while still providing an economic benefit to the school systems. School districts, unlike other taxing entities, are not allowed to grant tax abatements to companies. However, a recent state law allows the districts to cap tax valuations on new companies for a period of time. And this change could mean millions of dollars for school districts.