MidAmerican Energy, a Berkshire Hathaway-owned utility, announced it was going to build 2,000 megawatts worth of new wind turbines in an effort to get 85 percent of its energy from wind power in the coming years.
How are they able to do it? With generous green energy tax credits recently extended by Republican leadership in Congress. MidAmerican says it plans to use the Wind Production Tax Credit, or PTC, to make its big bet on wind financially feasible.
“Because of the tax credits and our ability to deliver these projects at a low cost, we’re setting up our customers for a low-carbon future,” MidAmerican CEO Bill Fehrman told The Wall Street Journal Thursday.
“Whatever happens with carbon regulations…we will be able to meet those requirements without additional costs for customers,” Fehrman said, referring to Environmental Protection Agency power plant regulations currently being challenged in court.
Iowa-based MidAmerican Energy is owned by Berkshire Hathaway Energy, which is a holding company for liberal billionaire Warren Buffett’s Berkshire Hathaway. Buffett is chairman and CEO of Berkshire.
Buffett has a long history of investing in wind energy, but his love for wind power is driven by lucrative tax credits handed out by the federal government for generating wind power.
“That’s the only reason to build them,” Buffett said of the wind tax credits in 2014. “They don’t make sense without the tax credit.”
The Wind PTC was recently extended by Congress as part of a deal hashed out between Republican leadership and Democrats to lift the decades-old ban on oil exports. Republicans allowed Democrats to get more tax credits for wind and solar power in exchange for allowing U.S. oil companies to export crude oil. The deal was opposed by many free market groups.
“This tax extenders deal is another example of the worst of Washington politics,” Tom Pyle, president of the free market American Energy Alliance wrote in a blog post. “It’s no wonder Congress’ approval rating is at an all time low.”
MidAmerican plans on spending $3.6 billion to boost wind to 85 percent of its portfolio. The investment would increase wind power’s share of electricity generation in Iowa to 40 percent, according to wind lobbyists.
Iowa gets more power from wind that any other state, but still most of the state’s electricity comes from coal. Coal-fired power provided “53% of power in 2015, while nuclear, natural gas and hydroelectric power generators produced roughly 16%,” according to WSJ.
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