Federal PTC Uncertainty Could Hurt Economic Growth in Logan County

What does uncertainty about the federal wind energy production tax credit mean for Illinois economy? The Lincoln Courier took a look last week, finding that the future of a wind farm hailed as an economic boom for Logan County would be uncertain:

Logan County could be dealt a billion-dollar blow if Congress fails to extend the federal wind energy production tax credit (PTC).

The American Wind Energy Association on Thursday said the credit is not included in payroll tax legislation currently passing through Congress.

Construction for Logan County’s Sugar Creek Wind Farm One is slated to begin in 2013. If the credit isn’t reinstated by then, the project could be stalled, depriving the local economy of sorely needed, and highly anticipated, relief.

According to Chris Nickell, vice president of site establishment for developer, American Wind Energy Management (AWEM), the income tax credit amounts to a maximum reimbursement of 30 percent of the total construction bill. Each turbine costs between $3 and $4 million to construct. The proposed project in Logan County consists of 110 towers, so the tax credit represents a savings of nearly $132 million spaced out over the first 10 years of SugarCreek’s operations.

“When you multiply that by 100 turbines, even 30 percent of that in a large number… The simple answer is that we’re moving forward with the assumption that PTC will be reinstated,” Nickell said. “Of course, it’s a wildcard for us and it makes everyone in the industry nervous, because it would be a large hit to the ability to finance projects, but everyone is pretty confident that things will come our way.”[...]

According to Logan & Lincoln Economic Development Partnership director Michael Maniscalco, that amount of money being pumped directly into the economy would greatly benefit lives locally.[...]

“It would open up a huge economic revenue stream for Logan County and our Logan County communities,” he said. “It really would benefit the schools the most… Every dollar that flows into the community gets spent someway and somehow. It’s a huge trickle-down effect. From talking with the guys at AWEM, the development of Athe two wind farms that they’re looking at in Logan County would probably mean somewhere around $1 billion. Whether it’s tax revenue, or money being spent within the communities, we’re talking about a billion-dollar investment in Logan County.”