Cumberland Times-News

Local News

October 10, 2012

Wind subsidy rattles area alliance member

KEYSER, W.Va. — The U.S. Department of the Treasury has announced a payment of $44.1 million through its 1603 program to Pinnacle Wind Farm LLC.

Wayne Spiggle, member of Allegheny Highlands Alliance, is opposed to the idea of Pinnacle receiving this money, especially for an industry that he claims doesn’t work very well.

“In my view, the wind subsidies, which amount to conservatively 60 percent of cost to build, are not worth borrowing from China,” said Spiggle.

Spiggle believes that all energy sources should be put on an even playing field.

“It doesn’t make sense and isn’t fair to other providers of electricity or to a taxpayer to pick a winner to spend that much tax money on an electric-generating scheme that doesn’t work,” said Spiggle. “All energy sources should pay all environmental and social costs, which is being done by coal for sure.”

Spiggle believes that there is a big difference between wind’s generation capacity and its true generating capacity.

“I want to make sure the true energy costs for electricity aren’t deferred to my children and grandchildren,” said Spiggle.

The wind project’s current generating capacity is 15269 MW but its actual generation is only 38.29 MW, or 25 percent efficiency, according to Spiggle.

“This inefficiency is very important to consider in our region and the rest of Appalachia,” said Spiggle, who added that wind turbines don’t often turn in the summer.

“I recently attended a wind forum sponsored by the West Virginia Division of Energy where it was stressed that to be viable wind must have a 30 percent efficiency rating. The PJM grid rates regional wind much lower than that, only 1 percent.”

In general, wind farms are expected to run at a capacity factor of between 30 and 40 percent, said Charley Parnell, vice president of public affairs for Edison Mission Energy of Irvine, Calif., in a previous interview with the Times-News.

“That is to say that they run about 30 to 40 percent of the time,” said Parnell.

The 1603 American Recovery and Reinvestment Tax Act program, which is administered by the Department of the Treasury in conjunction with the Department of Energy, offers renewable energy project developers cash payments in lieu of the investment tax credits, according to the treasury’s website.

The value of the awards are equivalent to 30 percent of the project’s total eligible cost basis in most cases.

For energy properties not placed in service in 2009, 2010 or 2011, an eligibility requirement of the 1603 program is that construction of the energy property must begin in 2009, 2010 or 2011, according to the treasury’s website.

Pinnacle Wind Farm at NewPage located on Green Mountain broke ground in February 2011 and was commissioned Jan. 23.

The Production Tax Credit, which is similar to the ITC, will be up for a vote after the election and should be defeated, said Spiggle.

PTC, which was created as an incentive under the order of the Energy Policy Act of 1992, provides an income tax credit of 2.2 cents per kilowatt-hour for the production of electricity from utility-scale turbines, according to the American Wind Energy Association.

The PTC is set to expire on Dec. 31. However, wind project developers can choose to receive an ITC in place of the PTC, according to the AWEA.

“The wind industry seeks a long-term extension of the PTC at full value to ensure consistency and market certainty,” states the AWEA. “The PTC is an effective policy tool to help developers raise capital in the marketplace, complete financing of wind projects and bring those projects to completion.”

 Spiggle said he thinks that it’s not worth going into debt over wind energy but it is worth going into debt over infrastructure.

“It’s worth going into debt to keep infrastructure like bridges and roads up. It stimulates jobs,” said Spiggle, who added that when Pinnacle was constructed it initially brought in about 200 jobs. “Now there are only four jobs left.”

There are 75,000 jobs supported by the wind industry across all 50 states, including manufacturing jobs at more than 400 facilities, according to the AWEA.    

“In the decade leading up to the 20 percent wind power benchmark, the U.S. wind industry could support roughly 500,000 jobs,” states the AWEA.

The AWEA is a national trade association representing wind power project developers, equipment suppliers, services providers, parts manufacturers, utilities and researchers involved in the wind industry, according to its website.

Contact Elaine Blaisdell at eblaisdell@times-news.com.

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