MidAmerican: Wind tax credit extension would protect consumers

Congress is debating another extension of tax credits for wind energy developments. (Photo courtesy of American Wind Energy Association)

MidAmerican Energy said the Trump administration’s move to extend renewable energy tax credits beyond the Dec. 31 deadline would protect consumers from potential construction delays related to the COVID-19 pandemic.

Both of Iowa’s investor-owned utilities, MidAmerican and Alliant Energy, have major wind developments in the works. Both have committed to increasing their renewable energy, with MidAmerican looking to produce the equivalent of all its retail energy from renewables, primarily wind and solar. 

U.S. Sen. Chuck Grassley and five other senators sent a letter to Treasury Secretary Steven Mnuchin last month seeking an extension to protect wind projects already under construction. The fear was that turbine shipments would be delayed.

In a May 7 letter, Treasury Principal Deputy Assistant Secretary Frederick Vaughan told Grassley, chairman of the Senate Finance Committee, the department “plans to modify the relevant rules in the future.” Grassley and the industry took that to mean that the production tax credit and the energy investment tax credit both will be extended. 

“Projects that have been waylaid by the economic disruptions of this pandemic can now proceed with more certainty,” Grassley said in a statement. “That means more certainty for American businesses and families at a time when stability is in short supply.”

In an interview, MidAmerican spokesman Geoff Greenwood said vendors have warned the utility about possible delays in turbine shipment. So far, the utility is on track to finish its current projects by the end of the year, as scheduled, he added. 

The production tax credit currently is 1.5 cents per kilowatt hour for projects under construction before Dec. 31. The investment tax credit is 12% to 30% of investment costs up front. Congress extended both last year.

“Most of our wind farm sites have not yet started taking delivery of wind turbines, but we’ve received notices of potential delays in turbine deliveries,” Greenwood said. “While we are coordinating extensively with our contractors to ensure our 2020 projects are complete by the end of the year, any delays beyond the end of the year would adversely affect our customers if the eligibility period for production tax credit were not extended. Because the (credit) enables us to add wind energy at no net cost to our customers, the change in U.S. Treasury Department guidance is very significant in terms of reducing risk and helping us achieve that outcome.”

MidAmerican “supports all forms of renewable generation and the tax credits make it possible to expand environmentally friendly sources of renewable generation economically for customers,” Greenwood added. He noted that both Grassley and Sen. Joni Ernst, both Iowa Republicans, championed the extension. 

MidAmerican has invested $11.9 billion in wind energy, and in 2019 delivered 61.3% of its energy on an annual basis, from renewables — primarily wind.

Alliant spokesman Morgan Hawk said that utility’s two wind farm projects underway this year are on schedule. “We have seen no significant impacts to wind construction projects at this time,” Hawk said. 

Alliant, which has a stake in a dozen wind farms and also buys wind power, is monitoring the Treasury action, he added.