MidAmerican Energy of Des Moines to build 258-turbine, 597-MW expansion next year in several Iowa counties, usingrenewed wind energy tax credits.

Dan Piller

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In an article posted by Dan Piller for the Des Moines Register, he reports a large wind project for 2011 by MidAmerican Energy.

MidAmerican Energy of Des Moines gave the wind industry a much-needed kick Tuesday when it announced a 258-turbine, 597-MW expansion to be built next year in Adair, Adams, Calhoun, and Cass counties.

The new project will provide electricity to about 190,000 retail electric customers in Iowa by 2012 and expand MidAmerican's nation-leading capacity of wind energy among investor-owned utilities from its current 1,280 megawatts to 1,877 MW. (A megawatt (MW) can power between 250 and 500 homes.) The project would also expand Iowa's wind generating capacity from 3,600 MW to more than 4,200 MW, second in the United States behind Texas. Because of Iowa's smaller population, Iowa ranks first in the nation in per-capita wind generation.

Groundbreaking for the first turbines is expected in the spring. The turbines will come from Siemens plants in Fort Madison and Hutchinson, Kan. The state gave Siemens a $1 million forgivable loan for a $44 million expansion of its next-generation wind turbine blade facility in Fort Madison, which employs about 600 people.

MidAmerican is also buying a 52-turbine wind project near Laurel, south of Marshalltown, from RPM Access of West Des Moines. Since MidAmerican operates under an agreement with state regulators to freeze rates through the end of 2013, the new wind project will not cause a rate increase for MidAmerican's 770,000 Iowa electricity customers. The company serves 770,000 customers in Iowa, including Council Bluffs, Davenport, Des Moines, Iowa City, Sioux City and Waterloo.

The project is the first announced after Congress renewed wind energy tax credits in its recent lame-duck session. Newly extended investment credits will not be used for the Iowa project. Instead, MidAmerican will use an existing production tax credit that allows deductions of up to 2.2 cents/kWh over a 10-year period. That deduction won't be up for extension until 2012.

Like other wind energy, the new turbines will be used for what utilities call "peaking" generation--supplementing the regular baseload electricity provided by coal-fired generators that run around the clock. That's why turbines don't always turn, even in windy conditions.

Expansion of wind industry slowed last year because of the uncertainty over congressional extension of the tax deductions, as well as competition from larger supplies of lower-priced natural gas.

The new MidAmerican project by itself would be larger than the 395 MW of wind-powered electric generating capacity added nationally in the third quarter of 2010, the lowest quarter since 2007. For all of 2010, 1,634 MW of wind power were installed nationally, down 72% versus 2009 and the lowest level since 2006. The Iowa Utilities Board approved a 1,000-MW expansion of MidAmerican's wind capacity in the state last year. MidAmerican was forthright in telling the Iowa Utilities Board that it doesn't have an immediate need for more wind capacity for its customers in Iowa, but the new capacity would be available for future use.

In the short run MidAmerican's surplus of energy is sold to other utilities. However, its new wind capacity will be available if MidAmerican and its partner, AEP of Columbus, Ohio, are able to build a 765-kV transmission line that would connect wind energy in Iowa and the Upper Midwest with larger markets east of the Mississippi River.

Midwestern wind interests got a boost earlier this month when the Federal Energy Regulatory Commission approved a plan that would spread the costs for new multistate transmission for wind - estimated to be as high as $25 billion to $30 billion - among all users and not just the individual generators.

American Wind Energy Association: Wind Tax Credits