WASHINGTON — Champions of clean energy often look to California and other blue states for leadership on green issues, but lately the state that is the king of wind power is a decidedly red one in the heart of Middle America.
To be sure, Iowa’s success with wind was helped in no small part by its geography. Part of the infamous Tornado Alley, Iowa’s flat topography enables better and more frequent wind gusts. “The plains are where wind blows the best,” says Radha Adhar, a lobbyist for the Sierra Club.
But Iowa also adopted some of the nation’s first policies to promote renewable energy. In 1983, the state passed legislation creating a Renewable Portfolio Standard, which directed the state’s utilities to alter their generation mix to include at least 105 megawatts of renewable capacity, an initial goal that led the way for Iowa’s current 5,708 MW from wind.
“We are proud of Iowa’s leadership in wind energy,” Gov. Terry Branstad, a Republican, said in a Feb. 29 statement. “We are committed to building an even greener Iowa future that will provide our Iowa families with cleaner, renewable energy and job opportunities.”
Thirty-seven states have since adopted required or voluntary renewable standards, with Hawaii and Vermont most recently updating their standards in 2015 to a 100 percent RPS by 2045 and a 75 percent RPS by 2032, respectively.
The Energy Information Administration reported at the end of February that Iowa now gets more than 31.3 percent of its electricity from wind, more than any other state.
Iowa is pushing to increase the share of wind generation to 40 percent within the next five years, which would have lasting economic impacts beyond job growth, the Energy Department reported.
Pays the bills
The wind industry in Iowa could by 2030 pay $136 million in annual property tax revenue (an amount that would represent about 3 percent of current property tax revenue) and $55 million in annual lease payments to rural landowners, according to the report. By 2050, the industry could generate enough electricity to power 6.3 million homes and save electric consumers $3.6 billion.
“The state takes it direction from its leaders, and those leaders are very supportive of renewable energy,” says Deirdre Hirner, the American Wind Energy Association’s Midwest state policy director. “The governor sees wind as a resource with export potential. It not only benefits the people in Iowa, the state also has an additional commodity to ship out of state.”
Revenue from those sales to other states helps raise funding for infrastructure improvements for roads and bridges while also boosting Iowa education programs, Hirner says. And any bit of revenue helps. Last year, the state raised its gas tax for the first time since 1989 to help fund infrastructure improvement.
“Iowa’s generation mix is changing in response to federal and state directives to reduce emissions,” says Iowa Utility Association spokesman Daniel Evans. “Iowa has favorable wind resources, the support of legislative and regulatory leaders and the commitment of utilities to promote wind generation.”
That support crosses party lines. “In Iowa, the state is overwhelming red, with only one district represented by a Democrat, but that has not diminished support for wind at all because the policy works,” Adhar says.
Iowa lawmakers argue that wind power can only improve the state’s energy mix through additional power diversification, ensuring grid reliability and energy independence.
Also aiding the wind energy expansion is a five-year extension of the federal wind production tax credit, which was included as part of the fiscal 2016 omnibus deal. Republicans traded the extensions, among other things, in exchange for the lifting of the crude oil export ban.
The wind tax credit first went into effect in 1992, enabling an inflation-adjusted per-kilowatt-hour tax credit (currently a $0.023/kWh for wind), but it has experienced some lapses since then. Iowa also offers a five-year tax exemption for properties hosting a wind turbine.
Sen. Charles E. Grassley, R-Iowa, said the intention of the extension was always meant to lead to an eventual phase-out of the tax credit.
“He continues to strongly support the wind industry,” Grassley spokesperson Jill Gerber said in an email. “He was able to secure the five-year extension likely leading to a phase-out, which is longer than such tax extender provisions usually are, to be able to give the industry certainty for planning, investment and job creation. The wind industry has shown strong leadership in proposing a phase-out, unlike other energy industries.”
The current wind credit will disappear by 2022, a compromise the wind industry backed in an effort to gain certainty with the tax credit. Prior to the extension, the industry operated under “boom-or-bust” years when the tax credit’s future remained doubtful year to year. This extension enables foresight until 2022, which the industry sees as enough time for states to begin seriously considering ways to meet obligations under the EPA Clean Power Plan.
“The industry is working hard to scale up and make the most of policy certainty from a five-year PTC extension and we will need to continue to work with policymakers at the state and federal level in the years ahead to level the playing field with other energy sources that receive permanent tax support,” American Wind Energy spokesman David Ward said in an email. “We will continue to stress the importance of smooth, stable policies to support wind power’s continued growth.”
No to subsidy
And while wind power generally has bipartisan support in Washington, opposition to the tax credits and Energy Department subsidies for the technology is growing.
At a March 9 Senate Energy-Water Appropriations Subcommittee hearing on the Energy Department’s fiscal 2017 budget request, the panel’s top Republican and its top Democrat both expressed resistance to continuing DOE’s wind research and incentive program for the 23rd consecutive year.
“I think we ought to take a real look at those subsidies that have existed for more than 20 years,” Sen. Dianne Feinstein, D-Calif., said at the hearing. “It seems to me that the new energy architecture ought to be able to prove itself in terms of its market acceptance within a 20-year period and not be continued beyond that.”
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