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Saving Birds and Bucks: Wind States Its Case

Who says bipartisanism is dead in America? Look at the wind industry — which is struggling to save the Production Tax Credit (PTC) and the tens of thousands of jobs that have been created because it — and you'll see alliances coalescing around both sides of the issue.

There’s a fair amount of agreement in the halls of Congress regarding the benefits of wind energy and the need to extend the PTC, which expires at the end of the year. The issue has dominated the industry in recent months and credible analysis has determined that the threat of its expiration could derail a growing sector of the economy. Across the country, the concerns are about as bipartisan as things get these days.

Regionally, we have Republican and Democratic governors seemingly united on what the industry means to their bottom line on jobs. We have senators on both sides of the aisle in agreement that the PTC is worth saving, though the difficulty lies in exactly how to save it.

Much of this Congressional support is focused in the Midwest — where wind generation thrives — and in various spots scattered across the country where manufacturing has taken root. In the rest of the country, vocal support for wind jobs is by and large lacking. At best, it’s dispassionate.

On the other side of the issue is an uneasy alliance between those legitimately concerned about environmental impacts and critics who say that wind energy is a boondoggle that will never live up to its hype. The argument that we need to extend the PTC to save jobs doesn’t resonate in these circles. In fact, in their view, it likely exacerbates the problem.

But there are signs that the wind industry is moving aggressively to answer concerns on both pricing and the environment. This week, a Synapse Energy Economics study looking at the Midwest market found that adding wind energy has the potential to decrease what matters most to consumers — their monthly bill. And on the environmental front, the American Wind Energy Association (AWEA) and 40 individual companies with stakes in the wind industry have signed a letter openly supporting the U.S. Fish and Wildlife Service’s voluntary land-based Wind Energy Guidelines, which were crafted over several years of dialogue between the wind industry and key environmental groups.

Both developments have the potential to defuse some of the biggest criticisms out there as the wind industry continues to make its case to legislators and consumers alike.

The Pricing

The Synapse Energy study looked at the Midwest ISO, which includes virtually all of Iowa, Minnesota, Wisconsin, Illinois, Indiana and Michigan and parts of Montana, North Dakota, South Dakota, Missouri and Kentucky.

The region is already home to some of the country’s best wind resources and some of the biggest wind farms. By December of 2011, the region had an installed capacity of 10 gigawatts, and Iowa itself generated more than 20 percent of its energy from its vast wind resources.

The Midwest, though, continues to rely heavily on coal, which makes up more than half of its generating capacity. So, to boost potential for wind development and to address reliability constraints, transmission congestion and clean energy mandates, the MISO region developed a new type of transmission project that it calls a Multi-Value Project (MVP), meaning each of the 17 projects it has approved addresses more than one of these concerns.

The study then looks at the potential impacts of adding wind development and transmission above and beyond these already approved projects. The result is that under certain scenarios, a ratepayer in the region could see as much as $200 annual savings by 2020 because of the downward pricing pressure that would come with new wind and transmission development.

According to the report, ongoing installation over the next two decades would continue to drive down utility bills and the “price suppression effect will be material and will be pervasive.”

Richard Caperton, Director of Clean Energy Investments at the Center for American Progress, explains how the concept of price suppression could impact the MISO, where power is sold through auctions. Caperton also writes that, “this effect doesn’t necessarily translate perfectly to other power markets across the country.”

But it’s reasonable to assume that this argument could hold sway with voters, legislators and consumers without a stake in the industry. Because who doesn’t appreciate the prospects of a lower monthly bill.

The Environment

Most major environmental organizations have been clear in their support of the wind industry. But that doesn’t mean there hasn’t been a fair amount of dialogue between those groups and the wind industry on how to alleviate some of the concerns that go along with large-scale development.

Chief among these has been the much-reported impact on birds, an argument just as likely to come from a supporter of fossil fuels as from a devout bird watcher. But the industry has long known that regardless of from where the concerns come, it has a public relations battle to deal with.

That’s why the industry recently sent a letter to Interior Secretary Ken Salazar to affirm its unilateral support for the voluntary guidelines drawn up to balance wind development with environmental protection.

The document offers best practices for site development, construction, retrofitting, repowering and decommissioning, and it works to open communication between developers and those who have a vested stake in the land and its surrounding habitat.

The guidelines will also help developers better assess the species that may be affected by a project, “including migratory birds; bats; bald and golden eagles and other birds of prey; prairie and sage grouse; and listed, proposed, or candidate endangered and threatened species.” It’ll use a tiered approach that addresses some of the major concerns from preliminary site evaluation all the way to the post-construction phase. These impacts may include:

  • Collisions with wind turbines and associated infrastructure;
  • Loss and degradation of habitat from turbines and infrastructure;
  • Fragmentation of large habitat blocks into smaller segments that may not support sensitive species;
  • Displacement and behavioral changes; and
  • Indirect effects such as increased predator populations or introduction of invasive plants.

The guidelines will allow the industry to get out ahead of environmental concerns. It’ll also help mitigate one of the arguments that resonates most with voters.

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