Articles filed under Taxes & Subsidies from Texas
"The PTC [production tax credit] is helping projects that are ready to go, that are shovel-ready, but the thing that is hurting the industry is really low gas prices that make it fairly hard to obtain financing," said Jimmy Horn of Horn Wind Energy.
The wind energy industry is dependent on something even more unpredictable than wind: Congress. Hidden in the turmoil over the "fiscal cliff" compromise was a tax credit for wind energy.
Sweetwater Mayor Greg Wortham, executive director of the Texas Wind Energy Clearinghouse, said he was unimpressed by the one-year extension of the tax credit. He estimated 40,000 wind energy jobs have been lost as companies have halted production, not put up turbines across the state and wait to see what Congress does with the tax credit.
Expiration of the credit would have a significant impact on development of about 80 turbines near Petronila in Nueces County, said Patrick Woodson, chief operating officer for Germany-based E.On Climate & Renewables in North America. The company wants to build in 2013.
Some wind experts think the credit extension will ultimately pass Congress, albeit after the November election ...others do not, and the industry is left to bemoan the difficulty of long-term planning. A one-year extension could mean the wrangling resumes next year. Hornaday said that Texas could benefit more than other states from a one-year extension because there are fewer rules here, making wind farms easier to build.
"Federal incentives for renewable energy, I believe, have distorted the competitive wholesale market" on the Texas grid, Nelson told the Senate Natural Resources Committee. Nelson said she believes those distortions are "one of the primary causes" of the current strains on the grid, and added: "I think we all need to move with extreme caution before adopting any additional incentives or mandates."
Many supporters are optimistic that the credit will be renewed, but doubt it will happen before the November election. And a last-minute deal probably won't prevent mass casualties for the U.S. wind power business. "Most of the damage has already been done," said Matt DaPrato, senior analyst for IHS Emerging Energy Research. "There's going to be a big drop-off in 2013 either way."
Texas has a commanding lead over other states in wind power production, as turbines supply 8 percent of the state grid's power. But the looming expiration of a federal tax credit jeopardizes the boom - and Texas' congressional delegation, for the most part, does not appear to be clamoring loudly to save it.
District Superintendent Christina Gutierrez said the school board has opposed tax incentives because economic losses from military cutbacks or closures could outweigh gains from the wind farm. The Kingsville base employed 597 military and 1,224 civilian personnel in 2010.
Trent ISD saw values plunge 35.1 percent, while values also slid for the city of Tye, Merkel ISD, the city of Buffalo Gap and Jim Ned Consolidated Independent School District. ...the changes have to do with wind turbines companies showing a tough business year. "The information that was brought to us by the wind turbine companies showed their income was down."
Keith Ellis, senior industrial and personal property appraiser, said there are several reasons wind farms and wind turbines have dropped in value. The price of electricity was low at the beginning of the year when values were set, he said, which means wind farms were not as profitable.
A wind farm of 160 megawatts only requires around seven maintenance workers after the horde of construction laborers leave. The comptroller's office criticizes the expense of those jobs, saying direct wind jobs are like "unicorns" and "mythical." "They bring in less jobs with the same capital investment as manufacturing," said Robert Wood, director of local government assistance and economic development at the Comptroller agency.
Abilene Superintendent Heath Burns said few school districts are negotiating property tax deals with industry these days because such plans cause the state's funding formula not to work well for the local school districts.
The Texas comptroller, not local school districts, should be in charge of negotiating school property tax breaks to businesses to attract large-scale investments such as manufacturing plants or wind farms, a new report by the Legislative Budget Board recommends.
According to a study from the Texas Comptrollers office, Texas spends too much to bring in windfarm contracts with little benefits. The Clay County Judge and Horn Wind -- the company in talks to construct the wind farm -- feel the study may be valid for the state but not for the county. In fact, the Vice President of the clean energy company says the wind farm will attract business to the county and will benefit every resident.
Texas is overpaying to lure major economic development projects, particularly wind farms, under a state law that allows school districts to grant tax breaks to recruit capital-intensive industries, a new study by Texas Comptroller Susan Combs concludes. Granting school property tax breaks has helped Texas attract manufacturing plants ...but the program "has increasingly been used to over-incentivize projects that create few or no jobs."
The Obama administration should bar a $1.5 billion wind-farm project in Texas from receiving U.S. government stimulus funds because most of the power turbines would be made in China, Senator Charles Schumer said. "The idea that stimulus funds would be used to create jobs overseas is quite troubling," Schumer, a New York Democrat, wrote in a draft of a letter he said yesterday he would send to U.S. Energy Secretary Steven Chu. ...Schumer said he would pursue legislation if necessary to prevent stimulus funds from being used for the Texas project.
News that $450 million in federal stimulus money might go toward installing Chinese-made wind turbines in Texas prompted criticism on Thursday, with Senator Charles E. Schumer, Democrat of New York, calling on the Obama administration to deny federal financing. According to partners in the deal, the proposed 600-megawatt wind farm, announced late last week, would be built on 36,000 acres in West Texas using 240 wind turbines manufactured by A-Power Energy Generation Systems of Shenyang, China.
A Democratic senator is calling on the Obama administration to reject an expected request for federal economic stimulus money as part of a $1.5 billion West Texas wind energy project because he says it will generate Chinese, not American, jobs. The U.S.-China venture, announced last week, would erect 240 huge Chinese-manufactured wind turbines on 36,000 acres in West Texas, with the Export-Import Bank of China committed to handle most of the financing.
Investment bankers are all aflutter with the onset of stimulus money for renewable energy projects according to the August 31 Wall Street Journal. After a long lag, numerous firms have again invested upwards of $100 million in wind farms. Investors are attracted by the quick returns made possible by the hefty federal grants and tax benefits. The growing subsidies for wind power mask wind's high cost and inherent limitations, but only for so long. ...Although appealing to many, wind power is an extremely expensive, inefficient, and unreliable source of electricity, incapable of providing base load power. Wind's intermittency, variability, line loss, necessary back-up generation, transmission needs, and dispatch complexity limit the amount of electricity wind can secure.