TOPEKA, Kan. - Securing policies that encourage clean energy investments will protect and strengthen our economy, as well as reduce our dependence on foreign sources of fuel. However, states cannot take advantage of existing resources without consistent federal and state policies to incentivize expansion.
At the state level, the Sebelius Administration has led the way to harness Kansas’ full wind energy potential through the establishment of a voluntary Renewable Portfolio Standard (RPS). As a result there has been a near tripling of wind farms in Kansas. We started 2008 with 364 MW generated from wind farms and will end the year with 1015 MW. Kansas will be only the seventh state to reach 1,000 MW of wind power.
Unfortunately, this past year, our friends in Congress failed to pass the production tax credit (PTC) that would incentivize wind energy investments into the future.
Governor Kathleen Sebelius and Lt. Governor Mark Parkinson strongly believe that to continue the progress in Kansas, the federal delegation must join state efforts to ensure cost-effective policies are implemented. They sent a letter this week to Congressional leadership and the Kansas delegation urging them to support the extension of the federal production tax credit for wind energy.
Less than four months from today the PTC is set to expire which, in turn, will result in a significant lapse in industry investments. The pending PTC extension has not only created overwhelming uncertainty for manufacturers and developers, it has also increased the level of industry risk making it more difficult for lenders to fund new projects.
“Kansas is in a position to greatly benefit from our wind resources. Extending the PTC will increase stability in the market which will allow more wind projects to go online in a timely manner,” Robert Freeman, CEO, TradeWind Energy.
Renewable tax credits have made it more economically feasible for projects to be funded. In 1999, 2001 and 2003, Congress failed to renew the PTC resulting in a significant drop in new wind installations for the subsequent years. Congress has extended the PTC since 2004 to allow for developers to plan for long-term.
Last year, the United States realized more economic growth in the wind industry than ever before. But unless the PTC is renewed, the stable growth of the wind industry will be threatened, and efforts impeded.
“If the wind industry is disadvantaged in the market place, economic development, job creation, and environmental and energy security benefits stimulated by wind energy development could decline in states across the country, including Kansas,” said Antonio Martins da Costa, CEO of Horizon Wind Energy.
A multi-year extension of the PTC will allow states to continue building momentum and get us closer to achieving energy independence.
The text of the letter follows:
September 12, 2008
Dear << Congressional leadership, member of the Kansas Congressional Delegation >>,
Renewable energy plays an important role in our nation’s energy security. By diversifying our domestic energy supply we can fight the inconsistency of fuel prices and prepare for a safer, more efficient future for our country. We strongly encourage our Republican and Democratic friends in the Senate to join forces with a bi-partisan majority of governors nationwide and to work to reach a Senate compromise to the current energy and tax extension impasse that has cast a cloud over support for federal tax incentives necessary to stimulate expansion of renewable technologies.
At the state level our Administration has been leading the way to harness Kansas’ full wind energy potential through the establishment of a voluntary Renewable Portfolio Standard (RPS). By partnering with Kansas utilities, we were able to negotiate a voluntary goal that has since put Kansas on the map for wind production. As a result there has been a near tripling of wind farms in Kansas. By the end of 2008 Kansas will be only the seventh state to reach 1,000 MW of wind power. However, immediate action by Congress to extend tax incentives for renewable energy is needed to ensure continued success and progress.
Extending the production tax credit (PTC) will allow states to incentivize investments in clean and affordable energy, as well as help to create new jobs. Securing a clean energy future must be a priority, and a multi-year PTC extension is a step in the right direction. Extending the PTC for at least three years will allow manufacturers and developers time to plan which will benefit our statewide growth in wind. In years past, very little investments were made in renewables without the PTC. We have the opportunity to guarantee results; now we must unite in our efforts so we can capitalize on our existing assets.
By coming together at the federal and state level to advance economically and environmentally sound policies, we will balance our energy portfolio as well as permit reliable alternatives to bridge the gap for more efficient technologies in the future. That, in turn, will help us to avoid outages and keep electricity rates down. Better policies will help to make us a leader in this national quest for diversification.
Please join us in promoting the policies that are necessary to spur the growth of a cleaner future for generations to come.
Kathleen Sebelius Mark Parkinson
Governor Lt. Governor