A federal law passed in 1978 that requires electric utilities to purchase electricity produced from certain efficient power producers (frequently using renewable or natural gas resources). Utilities purchase power at a rate equal to the costs they avoid by not needing to generate the power themselves. State regulatory agencies establish the rate based on local conditions, utility balance sheet, and resource reporting.
Policy - Federal Level
For the first time in U.S agriculture policy, the 2002 Farm Bill included an energy title that established a variety of programs to support farm-based renewable energy grant and loan guarantee program administered through the U.S Department of Agriculture - Rural Development. The Farm Bill is on a 5-year cycle and there is talk about additional support for agriculturally based wind and other renewable energy development.
The first time since 1992 that the federal government revisited national energy policy. The Energy Policy Act of 2005 included an extension of the Production Tax Credit (PTC) through the end of 007, the creation of Clean Renewable Energy Bonds, and many other provisions.
A federal statute that, among other things, established additional forms of non-utility generators. It also permitted non-generator-owning municipalities to purchase wholesale electricity, thus opening the door to municipalization, which allows municipal governments to take control over providing electric service to electric consumers.
2002 Farm Bill Makes History with New Energy Title
The 2002 Farm Bill’s Energy Title is being hailed as a victory for farmers, the rural economy and the environment. Title IX of the Farm Security and Rural Investment Act of 2002, approved by congress and signed by President Bush in May, provides $115 million to assist farmers and ranchers in developing renewable energy projects and making energy-efficiency improvements. Another $290 million will fund new biomass energy research, biodiesel fuel education and the existing Commodity Credit Corporation subsidy program for the production of biodiesel and ethanol, bringing the Energy Title’s totalFarmer harvesting the wind appropriations to $405 million through 2007.
The Energy Title is new territory for Federal farm legislation, reflecting the growing importance of farms in our nation’s energy system. A coalition of Midwestern farmer, environmental, and rural economic development groups, including Windustry, worked hard to frame the energy provisions and gather broad-based support. At his signing ceremony, President Bush acknowledged the growing importance of farms in the nation’s energy system, saying “Farming is the first industry of America - the industry that feeds us, the industry that clothes us, and the industry that increasingly provides more of our energy.”
The money allocated for clean energy in the farm bill could be a tremendous boost for farmers and rural communities interested in developing wind energy. Under the new bill, the United States Department of Agriculture (USDA) will have $115 million over five years to make low-interest loans, loan-guarantees and grants to farmers, ranchers, and rural small businesses to purchase and install renewable energy systems and make energy-efficiency improvements. The money will be available to those who demonstrate need under criteria to be established by the USDA. The grants cannot exceed 25 percent of the cost of a project, and a combined grant and loan or guarantee cannot exceed 50 percent of the cost of a project. The USDA will consider a variety of factors, including the type of renewable energy system, the quantity of energy likely to be generated, the environmental benefits, and the reproducibility of the system when determining the amount of a grant or loan.
The new legislation should help encourage wind projects in states like North and South Dakota where huge wind resources have barely begun to be developed. Herb Manig, Executive Vice President of the North Dakota Farm Bureau, said, “The Energy Title comes at a timely juncture as our nation's consumers are increasing their demand for "clean" forms of energy, and as our nation's farmers struggle with abundant crops and low market prices. Not only will it assist farmers with their own needs for energy efficiency, it can help farmers develop and market alternate forms of energy. It will help protect our environment, reduce our dependence on foreign oil, and bring greatly needed income to agricultural producers.”
Other sections of the farm bill, including the Rural Development Title and the Conservation Title, also have provisions that should prove to be beneficial to wind. The Conservation Reserve Program (CRP), a voluntary program for agricultural landowners that encourages land conservation, was amended to allow wind turbines and biomass harvesting on CRP lands. Wind projects will be subject to USDA approval based on site location and consistency with the soil, water and habitat goals of the CRP program.
Under the Rural Development Title, renewable energy systems were made eligible for grants under the Value-Added Grant Program and the Consolidation Farm and Development Act was amended to allow loans and loan guarantees for wind systems and methane digesters.
The Energy Title is a relatively small portion of the overall bill (it allocates $405 million over six years, while the full bill is estimated at $190 billion over ten years) and has not gain nearly as much attention as the increased crop subsidies and the conservation measures. However, it might be the bill’s most important provision for the future of American agriculture.
“The Energy Title is one of the strongest components of this bill. It builds on the stuff we’ve been working on, making the nation’s energy supply domestic, diverse, decentralized and renewable,” said Larry Mitchell, Chief Executive Office of the American Corn Growers Association. While the rest of the farm bill increases subsidies for traditional crops, the Energy Title creates an opportunity for farmers to diversify and supplement their incomes.
According to Tom Sloan, Vice Chair of House Utility Committee, Kansas House of Representatives, creating new sources of income for farmers also might help preserve family farms and the rural way of life. “Wind Power is an exciting new industry and if there is an annual income from wind turbines then it’s more incentive for the youngest generation to remain on or return to the farm - which really changes the demographics of rural counties.”
“The Energy Title establishes energy policy as an integral part of agricultural policy which will create a bigger market for farm-based energy that will benefit rural communities,” said David Benson, farmer and Nobles County Commissioner in Southwest Minnesota.
Windustry is looking forward to the speedy implementation of the Farm Bill and will work to ensure that the Energy Title provisions foster clean and economically advantageous renewable energy for rural communities and for the nation. You can follow the process on a new USDA website: www.usda.gov/farmbill.
Where is the Wind?
The first step toward developing wind energy is finding where the best wind is. New wind resource maps are now available from Wind Powering America: www.windpowermaps.org/windmaps/states.asp
* Idaho (released April 2002)
* Montana (released April 2002)
* Oregon (final version TBA)
* Washington (released January 2002)
* Wyoming (released April 2002)
* Selected Portions of California, Nevada and Utah (released March 2002)
Wind resource maps are available for many other states from: www.eren.doe.gov/windpoweringamerica/where_is_wind.html.
Links to new maps are also available from the Renewable Energy Atlas of the West project at: www.energyatlas.org. This project is working to compile information on wind, biomass, solar and geothermal resources from eleven western states into a single Geographic Information Systems (GIS) database.
Progress on Capital Hill
Senate passes Renewable Portfolio Standard
In April, the U.S. Senate passed an Energy Bill that includes a Renewable Portfolio Standard (RPS), a provision requiring ten percent of electricity generation in the United States to come from renewable sources by 2020. A national RPS is the single most powerful way to vastly expand the market for wind energy. The House energy bill passed last year does not contain an RPS and the two bills have yet to be reconciled.
Production Tax Credit
In other good news for wind, congress renewed the Production Tax Credit (PTC) for wind energy in March as part of a long-delayed economic stimulus package. The inflation-adjusted 1.5 cent-per-kilowatt-hour tax credit for electricity generated with wind turbines was extended through 2003, allowing hundreds of wind projects to get back on track. The PTC is critical to making wind projects economically viable. A provision to extend the credit through 2006 is part of the energy bill passed by the Senate in April. A national RPS and a longer-term extension for the PTC are essential elements for growth and financial stability in the wind industry. Where do your state’s representatives stand on renewable energy development?
June 21-23, 2002 -- Midwest Renewable Energy and Sustainable Living Fair, Custer, Wisconsin. Contact: Midwest Renewable Energy Association at (715) 592-6595 or visit www.the-mrea.org.
July 13, 2002 -- Sustainability Fair 2002, Livingston, Montana. Rotary Park next to historic Depot Center downtown. Contact: Jody Allen at (406) 222-0730 or firstname.lastname@example.org.
August 12-23, 2002 -- Wind Energy Workshop, Carbondale, Colorado. A hands-on workshop to learn everything from how to measure the wind to designing a system to doing an actual installation. For more information, contact Solar Energy International at www.solarenergy.org.
November 21-22, 2002 – Minnesota Wind Conference, Minneapolis Minnesota. Save the date for a conference on reaching Minnesota’s Renewable Energy Objective.
Windustry builds collaborations and provides technical support to create an understanding of wind energy opportunities for economic development. Windustry is affiliated with the Institute for Agriculture and Trade Policy.
Windustry Evolves and Expands
Windustry has doubled in size this spring with the hiring of a new Program Associate, Sarah Johnson. She is a former intern at Minnesotans for an Energy-Efficient Economy and holds a degree in geology from Carleton College in Northfield, Minnesota. Also, Windustry’s office has officially moved to the Institute for Agriculture and Trade Policy in Minneapolis. With this expansion, look for more frequent newsletters and updates to our website.
Wind Farmers Network
The purpose of the Wind Farmers Network is to bring together a broad range of landowners, farmers and ranchers to exchange their experiences in wind development and educate others who would like to begin farming the wind. If you would like to join the network, please send your contact information and a brief sentence describing your wind energy interests to Windustry or join online at www.windustry.org/about/join.htm. Your information may be shared with other wind farmers within the network only. The network is currently under development.
Click on the link below for a pdf version.
Winter 1999 Newsletter
Wind Energy Sails into the Next Millennium
The White House and Congress reached an accord just before Thanksgiving to renew several expiring tax incentives, including an extension of the Federal Wind Energy Production Tax Credit. The original Production Tax Credit (PTC) provided a 1.5 cent per kilowatt-hour credit for energy produced from a new facility brought online after December 31, 1993 and before July 1, 1999. The annual payment goes for the first ten years of the facility's existence. The PTC was created as part of the Energy Policy Act of 1992 (EPAct) to support investment in an emerging sector of the energy industry. The tax payment is a significant component in setting the price of wind energy contracts with utilities.
As you can see from the tables below in 1999 there was a great deal of wind activity in Minnesota to get wind facilities completed and officially online before the PTC expired. Most of these projects had been in planning and permitting stages for close to two or three years. The PTC was just extended for new facilities coming online from July 1, 1999 through December 31, 2001. The PTC 1.5 cent per kilowatt-hour is indexed annually for inflation and is currently at 1.7cents. The deal also would extend a tax credit for electricity produced not only from wind but also biomass and for the first time would allow the credit for electricity produced from chicken waste. Now is the time to let the lawmakers know they did the right thing this session, and start to encourage them in the next session to make the PTC permanent and not wait until this extension expires. You can call the Congressional Information Operator at 202/225-3121 to ask for your member of Congress or Senators.
Minnesota Projects Prior to 1999 (Please see attached pdf for table)
Minnesota Projects that Started Producing Electricity in 1999 (Please see attached pdf for table)
Wind Powering America
Announced in June, Wind Powering America is a new initiative designed to increase US wind power capacity to 5% of the nation's electricity supply by 2020. Through policy measures and new partnerships to address the current challenges of wind development, US Secretary of Energy Bill Richardson said the Administration "is taking steps to make wind a permanent presence in the nation's energy portfolio."
The three main goals for wind power development are:
1) Provide at least 5% of the nation's electricity with wind energy by 2020
– install 5,000 MW by 2005
– install 10,000 MW by 2010
2) Double the number of states with 20 MW or more wind capacity to 16 by 2005, and triple that number to 24 states by 2010;
3) Increase the wind energy component of the federal government's use to 5% by 2010.
This commitment to dramatically increase the use of wind energy in the United States is also intended to help establish new sources of income for farmers, rural landowners and Native Americans; and to help meet the growing demand for clean sources of electricity.
For more information: http://www.eren.doe.gov/windpoweringamerica
New Home, New Work, New Sponsors - A Note from the Director
This wind energy information project has grown and developed in many different ways in the past few months. A team of wind energy experts and enthusiasts have volunteered time and ideas over the last few months and I would like to extend a great big THANK YOU for their efforts.
*Rory Artig, Energy Division, MN Dept. of Commerce
* David Benson, Farmer, Nobles County Commissioner
*Jim Boerboom, MN Dept. of Agriculture
*Margaret Donahoe, Office of the late Senator Janet Johnson
*Michael Noble, Minnesotans for an Energy-Efficient Economy
*Brian Parsons, National Renewable Energy Laboratory
*Lola Schoenrich, Minnesota Project
*Christopher Reed, Moorhead Public Service
*Janet Streff, Energy Division, MN Dept. of Commerce
I am very pleased to report that the Windustry Project has new partnerships in sponsoring its work. This newsletter and the up coming town meetings listed to the right are now being sponsored by the Minnesota Department of Commerce, formerly part of the Dept. of Public Service (DPS). The purpose of this work is to provide rural landowners and community leaders with technical assistance and the latest information on wind energy development. Also, I am excited to announce the Windustry Project is newly in association with the Institute for Agriculture and Trade Policy. This is a non-profit organization that does research, education, and advocacy work to address agriculture and rural community issues on local, national and international bases. Recognizing the potential economic, environmental and social benefits of wind power for such communities, the Institute has welcomed the chance to sponsor the Windustry Project. We have already begun to integrate our wind power agenda into the Institute's vision for sustainable rural communities.
I will still be a partner of the SEED coalition, that I have been working with for the past 4 years. The SEED coalition is working to identify and promote opportunities for renewable energy and economic development.
I look forward to continued work with citizens and rural communities helping create new ways that wind energy can be a strong economic component in the rural economy.
With warmest regards for the Holiday Season,
Lisa Daniels, Director
Click on the link below for a pdf version.