An attempt to extend a federal tax break for wind energy production beyond the end of the year in Wyoming and elsewhere failed in the U.S. Senate on Tuesday.
While supporters of the tax break will likely try to bring the extension back to life, its most recent death likely counts as a blow to developers of wind farms in Wyoming and a wind turbine manufacturing plant bound for Cheyenne.
In February 2011, two manufacturing firms announced plans to build a wind turbine base manufacturing facility in a Cheyenne industrial park, but postponed plans late last year, citing uncertainty about federal and state taxes and transmission projects in the state.
While local economic development officials said late last year they expected construction to start this spring, there’s little movement at the site.
“They’re working on some options,” said Randy Bruns, chief executive of Cheyenne LEADS, the economic development corporation for the city and Laramie County. “They’re still engaged with us here in Cheyenne about a potential factory, but we aren’t gearing up for construction just yet.”
The failure to extend what’s known as the production tax credit is threatening wind farm development and jeopardizing the jobs of those who manufacture turbines in the U.S., said Denise Bode, chief executive of the American Wind Energy Association, a trade group for wind energy producers and manufacturers.
“We stand to lose one of America’s best new sources of American manufacturing jobs,” she said. “With every day that goes by, layoffs are occurring and further job losses and even plant closings will accelerate with each month we near expiration in December.”
Developers of several wind farm projects in Wyoming didn’t respond to requests for comment.
The amendment to a transportation bill, introduced by Sen. Debbie Stabenow, D-Mich., needed 11 more votes for approval but failed on a 49-49 vote.
Neither of Wyoming’s senators — both Republicans — voted for the amendment, which helps offset the cost of electricity production during a wind farm’s first 10 years.
Spokespeople for both Sen. John Barrasso and Sen. Mike Enzi emphasize the cost of the tax credit to the national debt and the tax break’s support for what Barrasso spokeswoman Laura Mengelkamp called “projects of questionable value.”
“The Stabenow amendment would have added $11.7 billion over 10 years to the deficit and reinstated problematic programs that had expired,” Enzi spokesman Dan Head said. “There have been many discussions about extending the production tax credit and this definitely will not be the last. Senator Enzi will analyze each of those efforts on its own.”
The federal tax climate isn’t the only one becoming less friendly to those seeking to develop wind farms in Wyoming.
In January, Wyoming began imposing a $1 per megawatt hour tax on wind energy production and a sales and use tax on equipment used in wind energy projects after state legislators nixed an alternate plan to continue a tax exemption for such projects and impose a 2 percent impact fee.
Gov. Matt Mead and some companies have expressed fears the growing state and federal tax burden could discourage new wind farm development in the state. Wyoming is home to many wind farms, but unlike Colorado, isn’t home to manufacturing plants for the turbines.
State and local economic development officials hoped to change that, and were pleased to announced in a February 2011 media release that Worthington Energy Inc. of Ohio and Spain-based Gestamp Renewables were teaming to build a $40 million plant that would employ 150 people.
But a slide in demand for new wind turbines could torpedo plans for the factory, although it’s not yet clear what the companies’ decision will be.
“They’ve got some other things in the works too,” Bruns said. “But I know that decision, and the timing of it, depends on when customers are going to need towers.”
The Associated Press contributed to this report.