Carolina Journal News Reports
Wind projects on the North Carolina coast are meeting resistance from three fronts: concerns over bird kills, worries about military training, and GOP presidential nominee Mitt Romney's opposition to favorable tax treatment for specific industries.
RALEIGH — A Beaufort County wind energy project that won conditional approval in March from the North Carolina Utilities Commission may never erect a single turbine.
Among the obstacles facing the Pantego project are the potential for a Mitt Romney victory in the November presidential election, conflicts with military aviation training, and the prospect that the wind turbines will cause the death of too many birds.
Through spokesmen and position papers, Republican presidential nominee Mitt Romney has made clear that he would urge Congress to end a federal tax credit for wind energy that makes the alternative power source economically feasible when compared with traditional sources. But no matter who wins the White House, objections from the military lodged with Gov. Bev Perdue could kill this wind project and others.
The project is being developed by Pantego Wind Energy, a wholly owned subsidiary of Chicago-based Invenergy. The Pantego project would generate up to 80 megawatts of electricity using 49 wind turbines situated on approximately 11,000 acres of privately owned land, east of Washington near the Town of Pantego.
Large-scale commercial wind projects depend on federal subsidies as well as state renewable energy mandates to create a demand for the electricity produced by their wind farms. Without these subsidies, it would economically unfeasible to build and operate them.
Wind turbines typically are 400 to 500 feet above the surface and are not compatible with low-level flying operations. Col. Jeannie Leavitt, commander of Seymour Johnson Air Force Base, stated her concerns about the project in a July 16 letter to Perdue.
“Wind farms and the windmills that comprise them will have a significant impact on the training of F-15E aircrews conducted by Seymour Johnson Air Force Base,” she wrote. On August 18 Perdue issued Executive Order 124 requiring all state agencies to consider the military’s requirements for low altitude aviation training areas before approving any project.
In addition to the military’s concerns, wind turbines may kill birds that fly nearby, and several protected species of birds — including bald eagles and migrating tundra swans — occupy the Pocosin Lakes National Wildlife Refuge and surrounding area. Pantego Wind has not estimated the impact a wind farm would have on those birds.
Formed a year ago, Pantego Wind Energy is a subsidiary of Chicago-based Invenergy, which calls itself the nation’s largest independent wind energy owner, operator, and developer. The company operates large-scale wind energy, solar energy, and natural gas-fueled electric generation facilities in North America and Europe.
Pantego Wind has secured conditional land leases for the windmills. The facility will be interconnected with Virginia-based Dominion Power’s Pantego Substation. Power it produces can be sold to Dominion or other investor-owned utility companies, electric cooperatives, and municipal electric suppliers.
The Obama administration has come under fire for its habit of giving federal funds to alternative energy operations that happened to be owned or operated by key politican donors. Michael Polsky, the owner of Invenergy, is a major contributor to President Obama’s 2008 and 2012 presidential campaigns. Polsky also contributed the individual $50,000 maximum to Obama’s 2009 presidential inauguration committee.
Polsky was one of several individuals named in Peter Schweizer’s recent book Throw Then All Out. Schweizer, a research fellow at the Hoover Institution at Stanford University, noted that Polsky, along with Duke Energy CEO Jim Rogers, was one of several major financial contributors to the Obama campaign and the Democratic Party who received millions of dollars in federal stimulus funds for their companies. Carolina Journal has learned that Invenergy has collected at least $199 million in stimulus payments for its wind farm operations.
Leavitt’s concerns revolve around hazards posed by the height of the structures as well as the radar interference produced by the turning blades.
“Please understand that we are troubled that building windmills in the proposed areas will adversely affect Seymour Johnson’s most frequently used low-level training routes, the primary bomb range used to train F-15E aircrew, and the most frequently used F-15E low-level flight training area,” Leavitt wrote in her letter to Perdue. “Additionally, windmill structures and rotating blades have a demonstrable negative effect on the F-15E’s main radar and its terrain following radar system. The effects are significant at both medium and low altitude flight levels.”
Leavitt hinted that wind farms pose a similar threat throughout the eastern part of the state. “I believe that wind farm developments in any part of eastern North Carolina [have] the potential to harm the training missions of Seymour Johnson Air Force Base and potentially other Department of Defense users of the airspace near the planned projects,” she wrote.
Even before receiving Leavitt’s letter, Perdue attempted to address concerns about the state’s relationship with the military bases. She held a series of Military Summits in October and November 2011 at North Carolina bases, establishing several task forces afterward.
One, named the Governor’s Land Compatibility Task Force, was charged with developing recommendations for preserving land uses that are compatible with the missions of the military facilities. The committee’s report, issued in May, specifically noted the potential problems posed by wind farms in training areas used by the Air Force and Marines.
Before approving the Pantego project, the Utilities Commission solicited comments from interested parties. In a December 2011 letter on behalf of the U.S. Department of the Interior and the Fish and Wildlife Service, Pocosin Lakes National Wildlife Refuge Manger Howard Phillips wrote, “the location of the Pantego Wind Energy, LLC project causes us great concern.”
Federal laws protecting species of birds and other wildlife can require businesses to estimate the impact of a project or development on the local animal population. Phillips explained that over a period of four to six months every year, the area is home to about 70 percent to 80 percent of the Eastern Population of tundra swans.
While the swans concentrate in the refuge areas, they routinely fly to surrounding agricultural and other lands to forage. “While there are few data on the potential impacts of wind farms on tundra swans, it seems reasonable to be concerned about 1) site avoidance (which means a loss of foraging habitat) and 2) direct mortality from turbine blade strikes (especially at night),” he said.
He said also that the wind turbines could kill other bird species such as bald eagles. And while Invenergy planned to study the bird population for one season, it may take years to get an accurate count because of crop rotation patterns and other variables. Phillips urged the commission to delay approval of the Pantego project until Invenergy completed risk assessment studies covering the area’s bird population.
The commission did not postpone approval, but in March, when it issued a Certificate of Public Convenience and Necessity to Pantego Wind, the commission declared that the facility “shall be constructed and operated in strict accordance with all applicable laws and regulation, including the Endanged Spiecies Act, the Migratory Bird Treaty Act, the Bald and Golden Eagle Protection Act, and any environmental permitting requirements.”
An email sent to CJ by Invenergy’s vice president for development, David Gronberg, suggests the company takes the bird issue seriously. “Invenergy LLC has concluded that additional studies are needed to learn more about the Pantego Wind project in Beaufort County with regard to the region’s bird population. Invenergy is confident that a full, fair, and factual study will demonstrate that the Pantego Wind Farm will protect and conserve the region’s wildlife, bird population, and natural resources.”
Tax credits and subsidies
The federal Renewable Energy Production Tax Credit program allows companies a 2.2¢ per-kilowatt-hour tax credit for electricity generated and sold to another company during the taxable year. The program will expire Dec. 31 unless Congress renews it.
Instead of the tax credit and other subsidies, Romney wants the federal government to concentrate alternative energy funding on basic research.
“Mitt Romney is a strong supporter of wind power and appreciates the industry’s extraordinary technological progress and its important contributions to America’s energy supply,” Romney spokesman Robert Reid told CJ. “Unfortunately, under President Obama’s approach, the industry has lost 10,000 jobs while growth in wind power nationally has slowed every single year of his term.”
Romney’s alternative, Reid said, would be “by promoting policies that remove regulatory barriers, support free enterprise and market-based competition, and reward technological innovation.”
Obama remains a strong supporter of federal subsidies for the industry. “Unfortunately, what we thought was a bipartisan consensus in supporting wind power has been fraying a little bit during election season,” he said during an Aug. 14 speech at the Laurel wind farm in Iowa. “My opponent in this election says he wants to end tax credits for wind energy, wind energy producers that make all this possible.”
Invenergy understandably wants the tax incentives to continue. “We’re not suggesting that renewable power is the single solution to our country’s energy needs,” Groberg wrote in an email to CJ. “Rather, it complements other sources of power generation — helping diversify our national energy supply. … With the demand for new power sources growing — especially for clean energy — and the cost of renewable power declining, it makes good, common sense for wind energy incentives to continue.”
The American Recovery and Reinvestment Act of 2009, aka the stimulus package, offered developers an alternative to the renewable energy production tax credits. Wind project developers could receive a 30 percent investment tax credit up front for facilities placed in service in 2009 and 2011 and for facilities placed in service before 2012 if construction began before the end of 2010. The program is named Treasury’s 1603 Program.
An audit report released in August by the Treasury Department’s Office of Inspector General stated that Invenergy and its affiliates have received $199 million in payments from the 1603 Program.
Pantego Wind is one is the second of two wind energy projects that has been approved by the Utilities Commission. The first, Desert Wind Energy, operated by the Spanish company Iberdrola Renewables, was approved in May 2011. The project would involve 150 wind turbines in a 31-square-mile area near Elizabeth City. The project has not secured any contracts to purchase energy produced there.
Utilities are reluctant to buy from wind power companies because that power costs more than the energy they generate from their own coal, natural gas, and nuclear facilities.
In letters dated Nov. 17, 2011, Perdue pleaded with Duke Energy, Progress Energy, and Dominion to sign contracts for Desert Wind power. “Developing our green economy is one of the cornerstones of my vision for North Carolina’s economic future. Projects such as the proposed Desert Wind Power Project by Iberdrola Renewables can help us lay the foundation for North Carolina to lead the nation in clean, homegrown energy,” she wrote.
“What is urgently needed now, to ensure its viability and long-term success, is an agreement with a utility company to purchase the power generated from this landmark project.”
Perdue’s plea to the power companies came the same month she set up the task force to address military issues, including the conflict with wind farms in northeastern North Carolina.
In December, Iberdrola officials announced that the project was on hold because the company could not secure any contracts to purchase the electricity.
Invenergy is pursuing another project in northeastern North Carolina, a 100-turbine project in the Hales Lake area in Camden and Currituck Counties. The company has not applied for a state permit.
Renewable Portfolio Standard
Large-scale commercial wind projects depend on federal subsidies as well as state renewable energy mandates to create a demand for the electricity produced by their wind farms.
In 2007, North Carolina became the first state in the Southeast to adopt a Renewable Energy and Energy Efficiency Portfolio Standard. By 2021, the energy portfolios of investor-owned utilities such as Duke Energy and Dominion Power must show that 12.5 percent of their energy needs are met either by energy from renewable sources or energy efficiency measures.
The standard remains controversial. Some critics have urged that it be modified or repealed. A longtime outspoken critic of wind energy subsidies is Morehead City resident and retired physicist John Droz. He maintains his concerns are rooted in science and economics.
“Whether an alternative/renewable is acceptable is a highly technical matter that should be decided on the basis of a comprehensive, independent, objective and transparent evaluation of three key conditions: its technical performance, the economics of the power produced, and its full environmental impact,” he told CJ. “All independent evidence to date indicates that industrial wind power fails on all three of these critical counts.”
Don Carrington is executive editor of Carolina Journal.