Utility execs state need for consistent energy policies with regard to wind energy; believe wind energy has bright future

by John M. Powers, online editor

Tulsa, OK, June 13, 2006 — Utility executives from several companies called for consistent tax and energy policies with regard to wind energy at a June 6 press conference held at the American Wind Energy Association’s (AWEA) WINDPOWER 2006 conference. The executives also explained the need for wind power to be integrated into the energy market at large instead of being operated outside of the energy market.

One of the issues that would greatly affect utilities choosing to include wind power in their mix is the production tax credit (PTC) which provides a tax credit for energy produced by a wind farm. The PTC is due to expire in 2007, at which time it will be up for renewal, yet runs the chance of expiring for good.

Dennis Welch, senior vice president for environment, safety and health at American Electric Power, said it is difficult to predict if the PTC will be renewed. If the PTC was dropped, said Welch, the amount of wind energy in AEP’s mix would certainly decrease, adding that there are still argument between states and the federal government about the use of wind energy.

Agreeing with Welch, Audrey Zibelman, COO of PJM Interconnection LLC, said that the nation needed a “consistent” tax and energy policy with regard to renewable energy, especially wind energy. Randall Swisher, executive director of AWEA, said the association was working for the extension of the PTC and John Hanger, president and CEO of PennFuture, predicted that the PTC would be extended and said he was hopeful the extension would be for a term longer than two years.

Sharon Hillman, vice president for resource planning at Exelon Corp., said a hurdle to a consistent energy policy for the nation is the issue of climate change. Future carbon emissions requirements, along with the PTC, will “determine greatly” how much wind energy will be used in the United States.

Though all the executives present said that they expected wind energy to play a role in the energy mixes of their companies, they all agreed that there were challenges from a market and public standpoint.

“It’s an educational challenge,” said Zibelman, referring to the public’s view of wind power. Wind farms are sometimes perceived as noisy and unsightly as well as having an environmental impact by killing birds and bats inadvertently, not to mention the need to build transmission lines for the power generated by the farms. Still, Zibelman said, the public wants “low cost, clean energy but they don’t want transmission lines in their back yards.” She added that the Energy Policy Act of 2005 made allowances for necessary investments in transmission infrastructure by giving the government imminent domain in some cases.

Zibelman also recommended that wind energy be operated as part of the energy market and not outside of the market.

Despite the challenges wind energy still faces, Swisher commented that in the past wind energy was something used by government mandate but that currently utilities and the wind energy industry have a “business relationship.” Swisher said he believes wind energy is a renewable energy that has a future in the nation’s energy mix. Echoing those sentiments, Frank Prager, managing director of environmental policy at Xcel Energy Inc., commented, “We believe there’s a bright future in wind.”

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