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Grassley: Wind power tax credit renewal unlikely until after election

Dave DeWitte, CR Gazette –

WEST BRANCH — U.S. Sen. Chuck Grassley told employees at the Acciona Windpower wind turbine plant here that Congress will probably renew a key tax credit for their industry, but not soon enough to avoid a slump in business.

Grassley toured the Spanish-owned wind turbine factory about one week after President Obama came to Newton to tour a wind tower factory and talk about the renewable energy Production Tax Credit. The credit provides 2.2 cents per kilowatt hour for power from wind facilities in service before Dec. 31, 2012.

The Acciona turbine plant employs about 103, down sharply from about 182 at the start of the last recession. The only new orders coming in to the plant have been from Canada, company officials said, because wind developers working in the United States don’t want to start projects until they are sure they will be covered by the credit. Canada doesn’t have a production tax credit.

“I’m very pessimistic that it’s going to get done before the election,” Grassley said of the tax credit extension after a 30-minute meeting with Acciona employees. He said getting the extension passed in November or December will be too late to keep the industry from losing momentum and shedding jobs, but he feels confident in the prospects for an extension.

Grassley said he agrees with President Obama on the need to support the tax credit, but that Obama should have spoken out forcefully months earlier when Congress was debating a tax bill that might have included it. Grassley said he’s had no trouble getting Democrats behind the tax credit extension, but that many Republicans don’t want to support it until they can find budget offsets to “pay for” the tax credit extension. At around $4 to $5 billion, the Production Tax Credit is one of the costlier tax credits that are sunsetting to pay for, he said.

“We’re going to do everything we can, as we have since the beginning of the year,” Grassley said in an interview.

When the Production Tax Credit was first enacted in 1992, Grassley said he had no idea that Iowa would become the second-leading state in production of wind energy, let alone that it would become a major location for manufacturing of wind power equipment.

During the Acciona tour, Grassley was thrilled to find out that the wind turbine assembly may begin sourcing a component from GMT Corp. in Waverly, only about 17 miles from Grassley’s hometown of New Hampton. About 70 percent of the components coming into the assembly operation come from North America, up considerably since the plant opened.

Acciona is now shipping abut two 1.5-megawatt wind turbines per week under a contract to supply 126 machines for a Montana installation to NaturEner.

Acciona Windpower North America CEO Joe Baker said that after the NaturEner production is completed, the company will shift to production of its first 3 megawatt turbines for a wind project near Mechanicsville to supply Central Iowa Power Cooperative.

One order for the new three-megawatt turbines to be installed in Canada before the end of 2013 is firming up quickly and another is coming along behind it, Baker said.

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