Major US Wind Power Installer Hails Recovery Act As Driver of Job Creation, Ongoing Domestic Investment
OR-based Iberdrola Renewables points to ARRA as driver of two dozen successful wind facilities, 9,000 US jobs, $6 billion in private investment
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October 14, 2010
PORTLAND, Ore., — Two years after the financial crisis hobbled the market for renewable energy tax credits, and in response to recent reporting that misrepresents how wind energy projects in the US competed for and received recovery funds, Iberdrola Renewables is highlighting the job creation and community benefits of each of its wind projects that received Section 1603 grant money under the American Recovery and Reinvestment Act, or ARRA. The company also noted the billions in additional investment it has planned to invest in the U.S. thanks to these same Recovery Act policies.
The Recovery Act’s Section 1603 reimbursement provisions prevented a severe contraction of the U.S. wind industry when the 2008 financial crisis rendered the previously successful and decades-old Production Tax Credit (PTC) program basically worthless, Iberdrola Renewables noted. The financial crisis wiped out the market for monetizing tax credits, leaving wind companies that were in the midst of building multi-million dollar facilities stuck with a decision to shut down construction and lay off workers or take huge financial losses.
Iberdrola Renewables itself faced stark choices as the financial crisis worsened, which forced the company to consider which projects could have been halted. Instead of contributing to the economic downturn, the Recovery Act’s conversion of tax credits into the 1603 reimbursement program allowed Iberdrola Renewables and the wind industry to continue building and keep thousands of workers on the job.
Since the reimbursement program was enacted in February 2009, thirteen Iberdrola Renewables projects received funding, creating or supporting 9,000 jobs. These projects are capable of generating 1,795 MW of clean, renewable wind energy. By re-packaging the long-standing tax credit, the Recovery Act allowed Iberdrola Renewables to leverage $975 million worth of grant money into as much as $6 billion worth of investment in U.S. renewable energy projects through 2012, noted company leaders.
“The ARRA created market certainty for our company, allowing us to continue projects that otherwise could have been halted or scrapped, like our 300MW installation at Cayuga Ridge, Illinois, and our 202 MW Peñascal II wind project in Texas,” said Don Furman, senior vice president, Iberdrola Renewables. “Not only have these projects directly created thousands of American jobs, they have also helped support local businesses, added revenue to the local tax base and income to landowners’ pockets. The economic ripple effects are huge. None of this would have been possible without Section 1603 re-packaging a longstanding tax credit.”
According to Furman, not only did grants ensure that stalled projects would be built, but that new developments could be undertaken as well. Like the PTC, the ARRA reimbursements are provided to projects upon completion, once projects are “placed in service,” or when they are ready and available for generating electricity for commercial sales. Projects were not eligible for Recovery Act funds when their construction phase was completed – a fact widely misunderstood and misreported, noted Furman. Projects were only eligible for Section 1603 funds if they were placed in service after December 31, 2008.
“Every Iberdrola Renewables project that received Recovery Act dollars went through that process and was placed in service after December 31, 2008, the date required for eligibility under the Act,” said Furman. “That’s been the rule since 1992, when the Production Tax Credit was created, and that was the rule we followed. Anyone who tells you that the end of construction means that a wind farm is ready to go hasn’t spent months after construction ends poring over a telephone book-sized checklist needed to place that facility in service.”
Iberdrola Renewables also noted that every grant dollar they have received has been reinvested in new U.S. projects, just as the tax credit revenue had been for years prior to the financial meltdown. In fact, Iberdrola Renewables currently has 1,200MW of projects in the construction phase across the country. These projects would not have been started without the market certainty the Recovery Act program provided, said Furman.
“The Recovery Act did much more than allow wind companies to finish the projects they started before the financial crisis,” Furman noted. “It allowed companies like Iberdrola Renewables to continue our long-term position in the U.S.”
Iberdrola Renewables’ wind projects have provided much-needed benefits to local economies and governments.
“The Cayuga Ridge wind project brings a positive and timely resource to our school district,” said Pontiac Township Superintendent Leo Johnson, whose Illinois community is home to the huge wind installation. “Not only does it provide much-needed monetary resources for our schools at a time the state is faltering, the hands-on learning potential associated with these turbines provided to our Ag and Science classes is irreplaceable.”
Below is a summary of each operational Iberdrola Renewables project that received a Section 1603 grant, the jobs supported by that project and the megawatts installed:
- Barton Chapel (TX), placed in service on 01/29/2009, created and supported 605 jobs, 120 MW
- Barton Wind (IA), placed in service on 6/25/2009, created and supported 894 jobs, 160 MW
- Streator Cayuga Ridge South (IL), placed in service on 3/1/2010, created and supported 1,523 jobs, 300 MW
- Dry Lake (AZ), placed in service on 9/28/2009, created and supported 349 jobs, 63 MW
- Farmers City (MO), placed in service on 4/11/2009, created and supported 841 jobs, 146 MW
- Hay Canyon (OR), placed in service on 2/13/2009, created and supported 563 jobs, 101 MW
- Locust Ridge II (PA), placed in service on 5/01/2009, created and supported 548 jobs, 102 MW
- Moraine II (MN), placed in service on 2/15/2009, created and supported 296 jobs, 50 MW
- Pebble Springs (OR), placed in service on 1/30/2009, created and supported 552 jobs, 99 MW
- Peñascal (TX) placed in service on 4/22/2009, created and supported 978 jobs, 202 MW
- Peñascal II (TX), placed in service on 5/13/2010, created and supported 978 jobs, 202 MW
- Rugby (ND), placed in service on 12/23/2009, created and supported 838 jobs, 149 MW
- Star Point (OR), placed in service on 2/26/2010, created and supported 552 jobs, 101 MW
The $6 billion in additional investment Iberdrola Renewables announced after the Recovery Act was passed has gone to support nine major wind projects under construction in seven states (Ohio, South Dakota, Minnesota, Washington, Arizona, New York and Oregon). These projects are creating thousands of much-needed jobs in construction, engineering, and transportation, while also stimulating manufacturing job creation up and down the wind energy supply chain. Iberdrola Renewables projects currently under construction include:
- Blue Creek (OH) – 304 MW under construction
- Big Horn II (WA) – 50 MW under construction
- Buffalo Ridge II (SD) – 210 MW under construction
- Dry Lake II (AZ) – 65.1 MW under construction
- Elm Creek II (MN) – 148.8 MW under construction
- Hardscrabble (NY) – 74 MW under construction
- Juniper Canyon (WA) – 151.2 MW under construction
- Leaning Juniper IIA (OR) – 90.3 MW under construction
- Leaning Juniper IIB (OR) – 111 MW under construction
More information on Iberdrola Renewables’ US wind projects is available at http://www.iberdrolarenewables.us.