Tax breaks for wind power irk some

Wind business thrives without subsidies, argues former teacher

By Steve Law

The Portland Tribune, Dec 18, 2008, Updated Oct 30, 2009 (3 Reader comments)

L.E. BASKOW / TRIBUNE PHOTO

Jody Wiser (left) complains that windmill developers are milking the state by increasingly splitting their projects into multiple phases to collect $11 million in energy tax credits for each phase. She formed a nonprofit political group, Tax Fairness Oregon, to counteract tax giveaways and has help from friend Kris Alman.

Jody Wiser is tilting at windmills.

While other Portland greenies and politicians are going gaga for wind power, the former Irvington Elementary School teacher argues the state is throwing away tax breaks to lure windmills that provide few permanent jobs and would locate here anyway.

“This is an astounding trick that’s being played on taxpayers,” said Wiser, volunteer leader of the group Tax Fairness Oregon.

Windmill projects are spreading like dandelions in the wind since the 2007 Legislature, at the urging of Gov. Ted Kulongoski, tripled the state Business Energy Tax Credit. Each windmill project now qualifies for $11 million in energy tax credits, up from $3.85 million. Since the increase, Oregon has conditionally approved tax credits for 10 windmill complexes, doubling the total number subsidized during the previous 15 years.

Rachel Shimshak, executive director of the Portland trade group Renewable Northwest Project, said the proliferation of windmills means the expanded state tax break is working as intended.

In a recent interview, Kulongoski said the Business Energy Tax Credit is helping make Oregon a world center of renewable energy, including windmills and solar manufacturing plants. After seeing Oregon lose a bidding war for a solar plant to New Mexico, Kulongoski said there’s no doubt subsidies are needed to compete for the jobs and clean energy Oregon wants and needs.

Wiser has no beef with proposed subsidies to convince Vestas to expand its North American headquarters in Portland.

However, a Renewable Northwest Project study of seven new wind farms revealed that they created about 11 permanent jobs at each complex, for operations and maintenance. At that rate, the Business Energy Tax Credit is providing about a $1 million subsidy for each permanent job, once initial construction is done. Wind projects also qualify for federal and other tax breaks.

Wiser complains that windmill developers are milking the state by increasingly splitting their projects into multiple phases to collect $11 million in energy tax credits for each phase.

Under the Renewable Portfolio Standard, also enacted by the Legislature last year at Kulongoski’s urging, Portland General Electric, PacifiCorp and Eugene Water & Electric Board must continuously increase the percentage of renewable energy they sell to customers.

That will assure that windmills locate here, Wiser said. Her group estimates that at least $44 million of the recent Oregon energy tax breaks are going to wind complexes that are selling their power to California, Washington and Idaho.

“Basically, we’re using our state’s tax money to help those states reach their renewable energy standards,” she said. “Nobody else throws $11 million at every wind farm.”

Across the country, renewable-energy mandates have proven the most successful strategy for luring wind power, said Glen Andersen, renewable-energy policy specialist for the National Conference of State Legislatures. Such mandates, combined with federal tax breaks, have helped make Texas the national leader in wind development, he said.

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