Is Iowa presidential vote riding on the wind?
Rob Hach can’t recall the last time he, or any member of his family, didn’t vote Republican.
He comes from a long line of German business owners, and Hach has turned three formerly vacant storefronts in a small, northwest Iowa town into an award-winning company that employs 26 people and builds testing equipment for wind farms.
But Hach was out working for his party’s opponent, President Barack Obama, at the Iowa State Fair last weekend, after a TV commercial for the Democratic president was shot in his Alta, Iowa, business a couple of weeks back.
He’s turned his back on the GOP nominee because Mitt Romney opposes the continuation of a key federal incentive for wind power development, saying that wind energy should stand on its own without subsidies.
That incentive has created customers for Hach’s business and helped make Iowa the nation’s leading state for wind power-related jobs.
Politics, particularly when it comes to wind power, is creating some strange bedfellows in the Hawkeye State.
“This is about jobs. It means tax dollars for schools. It means revitalization for rural America,” said Hach (pronounced “hawk”). “I’m doing everything I can to elect Obama.”
As it was four years ago, energy policy is helping drive the presidential debate in Iowa, the state that served as a launching point for Obama’s successful drive to the White House in 2008.
Then, the debate centered on subsidies for ethanol, which then-Republican presidential nominee John McCain opposed.
Today it’s wind power and renewal of the federal production tax credit, a law authored in 1992 by an Iowa Republican, U.S. Sen. Chuck Grassley.
With Obama and Romney running neck and neck in Iowa, a key battleground state, the politics of wind are heating up.
“Because the race is so close here, both candidates will try to latch onto any issue that will make a difference with Iowans,” said Dianne Bystrom of Iowa State University, a specialist in political communications. “In the past, it was ethanol. Now it’s wind.”
Support for wind energy in Iowa runs as deep as its dark topsoil, and the state has the highest number of wind-related jobs — 6,000 to 7,000 — in the nation.
Every Iowa governor, Republican and Democrat, over the past 20 years has supported development of wind power, and all seven members of the congressional delegation, as well as Republican Gov. Terry Branstad, back renewal of the federal production credit.
By contrast, Nebraska Gov. Dave Heineman said last week that he hadn’t formed an opinion on the wind tax credit issue, though he thinks the federal government needs to cut its spending and the $1.4 billion-a-year incentive needs to be part of that debate.
Meanwhile, both candidates for U.S. Senate in Nebraska, State Sen. Deb Fischer and former U.S. Sen. and Gov. Bob Kerrey, said they support some continuation of the production tax credit, though it is not a major issue in Nebraska.
Nebraska’s involvement in wind energy is a mere gust compared to Iowa’s cyclone.
About 20 percent of Iowa’s power is now generated by wind, compared with just over 1 percent in Nebraska.
Nearly 3,000 turbines blanket wind-blown ridges of Iowa, particularly in the western and northwestern portions of the state. They provide power for more than 1 million homes.
Only Texas generates more megawatts from wind, and Iowa aims to double its production by 2020.
Wind-related manufacturing has transformed formerly vacant factories in Iowa into producers of turbines, blades and towers. Farmers reap more than $14 million a year in lease payments for wind farms on their land. And small towns like Alta, population 1,800 and a two-hour drive from Omaha, are seeing economic development they haven’t seen in decades.
“Wind energy is another way of harvesting a Midwest commodity,” said Harold Prior of the Iowa Wind Energy Association, based in Spirit Lake, Iowa. “Our political leaders have made attracting this industry a top priority. People understand this industry brings great jobs to Iowa.”
The federal production tax credit was a key driver in the growth of wind power in Iowa and other big wind states, such as Texas, California, Illinois and Minnesota.
Wind farms can earn a federal income tax credit for 10 years, an incentive that makes wind energy more competitive with power generated by coal and nuclear energy.
The credit wasn’t as helpful in Nebraska because its public utilities could not directly obtain the tax credits. Only in recent years were laws enacted to allow the Cornhusker State to benefit from the credits.
But, by then, the state was playing catch-up, even though it has the fourth-best wind power potential in the U.S.
The production tax credit is scheduled to expire at the end of the year unless Congress acts to renew it.
Supporters predict that the U.S. wind industry will grind to halt after Jan. 1, pointing out that wind farm development dropped 77 percent in 2004, the last time the production tax credit was allowed to end.
Uncertainty over the issue is already having an impact on jobs and orders in the wind energy industry.
At his business, Anemometry Specialists, Hach said he’s already lost five employees because of a slowdown in orders for the wind-testing devices he sells to gauge the power of wind at potential turbine sites. He had employed 31 workers at his plant.
A $400 million, community-owned wind farm in being planned near Estherville, in northwest Iowa, is now on hold, after five years of planning, because of uncertainty over the federal credits.
Clipper Windpower, which has a turbine plant in Cedar Rapids, Iowa, just announced 174 layoffs companywide. The layoffs were attributed, in part, to the slowdown in orders because of the pending expiration of the tax credits.
Another Iowa manufacturer, Trinity Structural Towers, in Newton, is shifting its production away from turbine towers to rail cars because of the expected drop in new wind farms.
Iowa, Prior said, could lose up to 3,000 jobs.
In Nebraska, Tony Raimondo Jr. of Behlen Manufacturing said 10 employees produce wind turbine parts at his company’s plants in Columbus and Omaha (Distefano Tool and Manufacturing). But the firm’s biggest customer, Vestas, just announced that it’s laying off workers at its Pueblo, Colo., tower plant.
Also in Columbus, tower manufacturer Katana Summit is looking at a slowdown after a rush of work earlier this year.
Raimondo said that the nation needs to transition away from fossil fuels and that new technologies need subsidies.
“Wind energy needs to stand on its own (eventually), but that doesn’t happen overnight,” he said.
But Romney and other critics of the production tax credit have said it’s time for wind energy to compete on its own, without subsidies. The president’s push to create jobs related to renewable energy has fallen far short of expectations, they say.
A Romney spokesman in Iowa, Shawn McCoy, said the candidate supports wind energy but will try a different approach.
Romney, he said, will “remove regulatory barriers, support free enterprise and market-based competition, and reward technological innovation” to spur growth in wind power.
Supporters of renewing the production tax credit, though, say that if wind must compete on its own, entrenched and more expensive federal subsidies for oil and natural gas exploration should expire, too.
They say that wind power is nearly competitive, price-wise, with other forms of energy, and that extending the production tax credit for two to four more years may be all that’s needed to put wind energy, like ethanol, on solid footing
Several officials interviewed said they expect the wind incentive issue to be resolved after the November elections, during a lame-duck session. But some Iowans involved in the wind industry, like Hach, aren’t waiting.
He said he’s already looking at shifting the company’s focus to still-expanding wind energy work in Canada and South America.
And he has a simple explanation for why he’s switching parties this election.
“Iowans vote for politicians who support Iowa,” said Hach.