Biggest US wind farm won't expand next year without PTC
Houston (Platts)--6Jul2012/507 pm EDT/2107 GMT
The developer of the US' biggest wind farm in terms of megawatts, which
is due to get even bigger, said Friday it will not pursue expansion into 2013
if the production tax credit is not extended by Congress.
Terra-Gen Power's 1,020-MW Alta Wind farm in Tehachapi, California, is
expected to reach 1,320 MW by the end of the year. The phased-in facility,
located in Kern County about 115 miles north of Los Angeles, has separate
power purchase agreements carved out from a 1,550-MW master power purchase
agreement with Southern California Edison and is seen as helping the
investor-owned utility meet the state's ambitious renewable portfolio
However, what has been built thus far and what is under construction is
less than half of what was originally conceived in 2006 as a 3,100-MW project.
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That ambition is now in question as the Treasury Department's 1603 "cash
grant in lieu of tax credits" program dries up for wind developers at the end
of this year, when the alternative, the production tax credit, is also due to
Terra-Gen is in much the same position as other big wind farm developers
such as NextEra Energy Resources, Iberdrola Renewables and Horizon Wind
Energy, which have each said they will not be building new wind farms next
year without the PTC.
Spokesman Greg Wetstone said Friday that Terra-Gen's expansion of Alta
Wind in 2013 "is very much contingent on Congress passing the PTC extension."
Though many Democrats and some Republican Representatives and Senators
have supported a PTC extension, a vote on it is not expected until after the
presidential election in early November.
Even in the lame-duck Congress the possibility of extension is seen as
tied to the two political parties striking a deal on the larger issues of
extending the Bush tax cuts and Social Security payroll tax cuts.
Since March 2010 banks have on four occasions helped ArcLight Capital
Partners and Global Infrastructure Partners, owners of Terra-Gen, raise more
than $2.8 billion for Alta Wind's first nine phases.
Each capital raising relied, in part, on the projects receiving cash
reimbursements under the US Treasury's 1603 program, which reimburses
developers 30% of the cost of construction once the projects are connected to
In 2011 the owners and partners in Alta Wind phases 1 through 5, which
have a combined capacity of 660 MW, received approximately $445 million in
reimbursements from Treasury. By the end of this year, the owners and
partners of phases 6 through 9 are expected to be reimbursed another $445
Wind-farm developers were anticipating using the PTC next year to
replace 1603 cash as a capital-raising tool.
--Jeff Ryser, firstname.lastname@example.org
--Edited by Jason Lindquist, email@example.com