Ethanol isn’t the only renewable fuel source Iowans love

Source: BY KEVIN BOYD, R Street • Posted: Wednesday, April 1, 2015


When people think of Iowa, they almost instantly think of corn. Iowa is the nation’s largest producer of the stuff, and also has become famous (or infamous) for corn-derived ethanol. Presidential candidates who hope to win the state’s first-in-the-nation caucuses often pledge their support for the federal Renewable Fuel Standard, which mandates that gasoline must have a certain percentage of ethanol blended in.

But ethanol isn’t the only renewable fuel that Iowa farmers and state officials love. They also have an ongoing love affair with wind power.

Iowa is third in the country in the total amount of electricity generated by wind, placing it behind only Texas and California. According to a report earlier this year from Radio Iowa, the state generates 5,688 megawatts of electricity from wind power, with another estimated 550 megawatts of wind-production capacity under construction.

Iowa also leads the nation in getting 15.4 percent of its electricity from wind turbines, with some estimates putting the figure as high 27 percent of all Iowa homes powered by wind. Wind farms are located all over the state. The abundance of flat, open spaces means plenty of room for turbines. The state is also blessed with average wind speeds sufficiently high to make wind power feasible.

The wind industry in Iowa is supported by state subsidies. Iowa has a production tax credit of 1 to 1.5 cents per kilowatt hour of energy produced by a wind turbine. The federal production tax credit expired at the end of 2014. A Senate vote to reauthorize it was defeated in January.

Getting the federal wind tax credit reinstated remains nearly as much of a priority for state officials and Iowa’s agricultural community as preserving the Renewable Fuel Standard. The wind industry, which currently employs 4,000 Iowans and continues to grow, has generated millions of dollars of lease payments for Iowa farmers. Iowa officials claim increased wind production has helped attract technology companies to the state. Iowa was also the first state to create a renewable portfolio standard, but set at a relatively low 105 MW.

At the recent Iowa Ag Summit, many of the likely presidential candidates pledged their support not just for the RFS, but for renewing the federal wind tax credit. While a couple of candidates, most notably former Texas Gov. Rick Perry and Texas Sen. Ted Cruz, came out against federal subsidies for wind, these were exceptions to the rule.

Since the federal production tax credit has already expired, Congress should not renew it. The wind industry needs to stand on its own feet and compete in the free market.

Iowa should also phase out its wind production tax credit. Given the abundant wind resources and advancements in wind turbine technology, the wind industry can compete in the free market in that state.

Finally, Iowa should consider joining the states who have deregulated electric services. If Iowa customers want to choose utilities that generate electricity from clean sources, they should be allowed to do so. Deregulated utility states are able to provide options to help customers lower their bills over traditional regulated utilities.