Don't Drink the Tea. Think With the WE.

Congressional Stall Over Tax Break Could Cost Kansas a Vital Wind Energy Project

Congress’ willingness to extend a tax break for wind energy may predict the future of Kansas’ flourishing wind power industry. Republican Senator Jerry Moran of Kansas proposed a one-year extension over two weeks ago but it has yet to be voted on. The tax break, which has been in effect since 1992, was part of President Obama’s stimulus plan and therefore is likely to gain opposition from both deficit hawks and Obama detractors running for re-election.

John Graham, CEO of BP Wind Energy, the company which runs Kansas’ Flat Ridge Phase I and II wind farms, says the tax credit is an excellent stimulant to the industry at a minimal cost to the government.

The tax credit, Graham said, costs the government $3.5 billion a year and attracts $15 billion to $20 billion in investment. Sixty percent of wind energy components are now made in the U.S. “We think it’s a very good return,” he said.

In Kansas, where wind energy has taken off in part thanks to the tax credit, investors are waiting to see the result of the political process before committing the next round of resources. Historically, when this tax credit has been cancelled, which happened in 1999, 2001 and 2003, new construction plummeted between 73 and 93 percent the following year. Kansas and the wind industry can ill afford a hiccup of this magnitude.

“There is no state in the country that has more at stake in this than Kansas,” Sen. Moran said.

Without renewal, the tax credit will end on January 1st, 2013. This is a rare opportunity to flex bipartisan muscle in the interest of the environment. Alternative energy is a tricky issue on Capitol Hill, but if Washington can get its act together for a few moments the wind industry and Kansas’ economy will continue to witness growth and employ more people.

Below, video of the Flat Ridge wind farm with cattle grazing…


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