Regional city reps learn about wind energy

Friday, May 18, 2012

City representatives encountered high winds to and from Thursday evening's Northwest Iowa League of Cities meeting in Everly, where they learned the benefits of that wind.

"As the cost of energy rises ... and the cost of putting in renewables, including wind energy, comes down, there will be a point where it's just as economical to utilize wind energy as it is to draw from a coal power plant," Mike Fisher of HR Green told those in attendance.

Though natural gas prices are at an all time low, they are bound to increase as the commodity has been approved for exportation at the same time that drilling for natural gas is ceasing in some areas.

"So you have to think about the long-term play in terms of hedging your energy costs," Fisher said of the possibility of locking in a low rate for wind energy compared to variable rates for other energy sources.

Iowa is well positioned in the wind energy sector, with 75 percent of the state suitable for wind energy development, making it the seventh best wind resource in the nation. That wind resource is estimated at 570,000 megawatts, though only 4,495 megawatts of wind energy capacity is currently installed in the state.

Currently, Iowa produces 20 percent of its electricity from wind, ranking it first in the nation and second in the world.

The industry also employs between 6,000 and 7,000 Iowans, generates $2.6 billion in property tax dollars and pays farmers $4.46 million in revenue.

Fisher spoke favorably of Clean Line Energy's proposed Rock Island Clean Line, which would be able to transfer 3,500 megawatts of power from northwest Iowa to Illinois and other eastern states.

"If that line happens, it will be a huge, huge boon for this area, both in terms of construction of the system itself, because you're talking a $200-plus million conversion station that all the turbine lines come into and construction all the way across Iowa," Fisher said. "What you're really talking about is a lot of construction of wind turbine farms."

Federal policy will affect whether or not the line happens.

"What it's hinging on is federal energy policy and the continuation of the federal production tax credit," Fisher said. "Some of these farms, even if they put that line in, aren't going to go unless they can make money on it. Right now, the primary way they would be making money on all these farms up here right now is a 2.2 cent per kilowatt hour production tax credit."

According to Fisher, the credit is not a subsidy.

"Without the tax credit, none of these farms would happen and there wouldn't be any revenue," he said. "Don't look at it as a subsidy. Without that, we wouldn't have any of this economic base and we wouldn't have any revenue going into our treasury. Think about it that way."

That tax credit ends this year, despite the efforts of Iowa Senators Tom Harkin and Chuck Grassley, and no wind farms are scheduled to be constructed in Iowa in 2013.

On the city side of things, Fisher promoted the Iowa Energy Center's Alternative Energy Revolving Loan Program.

"It makes it feasible to put in a wind turbine when you don't have the capital to do the project," Fisher said of the 15-year 0 percent interest loans.

He also noted that Community Development Block Grant funds are available for cities with low- to moderate-income populations.

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