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Wind farm in limbo over tax-credit uncertainty

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E-on Climate & Renewables is in a race against time.

Unless Congress votes to extend renewable energy tax credits by the end of the year, the company has to have all 125 wind turbines operational in Phase 1 of the Wildcat Wind Farm. The investment in Phase 1 is an investment of $400 million.

Currently, White Construction is in the process of erecting the wind turbines in northern Madison County and eastern Tipton County.

As each of the 307-foot towers head skywards and the blades are attached, the turbines are changing the landscape of this mostly agricultural area. Dotting the skies will be the sight of wind turbines, towering over surrounding trees, farm fields and buildings.

From her back door in west Elwood, Julie Slayton can see several wind turbines off in the distance, but the sight doesn't concern her.

"We recycle and compost," she told the Kokomo Tribune. "Building the wind farm is a natural energy source. It's an alternative farm of energy that is more efficient."

The family is wondering how loud the turbines will be when the turbine blades begin operation. Slayton said the nearest turbine is approximately a half-mile away and the noise should not be bothersome.

"We can see them over the tree line," she said. "I think they are really neat-looking."

Mark McDermit lives on the east side of State Road 37, just north of where the turbines are being located. From his front yard several of the turbines are visible.

"They're far enough off in the distance that it doesn't bother us," he said.

McDermit said the turbines haven't been in place long enough for him determine if the sight of them will bother him in the future.

Although he hasn't leased any ground to E-on for the placement of a wind turbine on his farm, McDermit was unsure if he would sign a lease if one was offered.

"It ties up the ground for a long time," McDermit said.

Each wind turbine is expected to generate enough electrical power for 350 homes.

Andy Melka, project manager for E-on, said as of Tuesday a total of ten wind turbines have been constructed.

"For each one that isn't operational, we won't receive the tax credit," Melka said. "I'm fully confident we will have all 125 operational by the end of the year."

He said a second crane has been brought to the site in an effort to meet the Jan. 1 deadline and the construction crews are working six days a week.

Melka said the erecting of the wind turbines started in the most difficult part of the project along State Road 37, which has a number of power lines.

"Now that we're working west of State Road 37, the project will progress more quickly," he said.

As each of the 12 to 15 turbines are completed in a circuit, Melka said the turbines will be tested and then shut down until the entire project is ready to go on line.

The goal is to erect one wind turbine per day through the rest of the year, he said.

Eventually the Wildcat Wind Farm was supposed to encompass four different phases in Howard, Grant, Tipton and Madison counties.

"Without the tax credits, the rest of the phases are up in the air," Melka said. "Those phases become less likely to be completed without the tax credit."

The hope is that Congress will extend the renewable energy tax credits for several years and not one year at a time, he said.

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  • Not all costs included
    The problem with market pricing is that all of the costs (i.e. the externalities) are not built into the price. On a pure cost of production standard, a kwh of wind energy costs more than a kwh of coal power. But the costs of coal power are measured by more than dollars: water pollution, asthma, air pollution, greenhouse gases, mercury emissions, environmental costs from mining, and many other things are costs of coal power. Because the power producers don't pay those costs, they are not passed onto consumers. The subsidies for wind energy (and other sources of power with reduced negative externalities) help bring the market prices in line. Ideally, no power should be subsidized, and a tax equal to the negative externalities should be imposed on all sources of energy. Let the market be free, but make sure the costs are properly allocated so the market can properly decide which source of power is best.
  • What's your opinion?
    Should we continue to subsidize wind turbines? Shouldn't they be able to stand on their own economically without tax subsidies? People get the wrong idea. Even with tax breaks, wind kwh costs more than others. People need to realize that what is going on is about government policy. It is not about private industry making economic decisions. What do you think?

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  1. Great article and post scripts by Mike L (Great addition to IBJ BTW). Bobby's stubborn as a mule, and doubt if he ever comes back to IU. But the love he would receive would be enormous. Hope he shows some time, but not counting on it.

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