The American Wind Energy Association today welcomed the campaign
launched by T. Boone Pickens to strengthen U.S. economic and energy
security by boosting wind power production and confirmed that
ramping up wind power quickly on a large scale is feasible if the
government enacts the correct policies, starting with renewal of
the production tax credit. “Wind power has become a key option for
our country,” said AWEA Executive Director Randall Swisher.
“Earlier this year, the U.S. Department of Energy, in a major technical
report, confirmed that wind can generate 20% of U.S. electricity
supply by 2030 while providing benefits that far outweigh the cost.
And today, one of the nation’s leading energy businessmen is stating
that wind power is not only serious business, but perhaps the single
most important strategic investment the nation can make
today to strengthen our economy and energy security.

“In order to make this happen, however, the U.S. government will
need to play its part and enact short- and long-term policies to
transform many of our current practices,” added Swisher. “Of critical,
and immediate importance, is an extension of the federal production
tax credit, so that the industry can move ahead with planned investments
and keep people at work. Of equal importance will be longer-term
policies to plan for more transmission to bring large amounts of
wind power from windy areas to population centers.” According to
the DOE technical report, achieving a 20% wind contribution to U.S.
electricity supply by 2030 would:

• Reduce carbon dioxide emissions from electricity generation by 25% in 2030;
• Reduce natural gas use by 11%, which would in turn lower the pressure on natural gas prices;
• Support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry;
• Increase annual revenues to local communities to more than $1.5 billion by 2030; and
• Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030.

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Local or State Incentive Programs for
Wind Energy Investments

Wind and Photovoltaic Systems
Property Tax Exemption
In 1992, the Minnesota legislature enacted
MS2000 272.02(21) and (23) to exclude the value added
by photovoltaic and wind energy systems rated less than
2 MW from property taxation. Partial exemptions apply to larger
systems. Current rules state that wind systems between 2 and
12 MW of rated capacity are about 90% exempt from property
taxes, and projects over 12 MW are about 75% exempt.
In Minnesota, utilities face higher property tax rates than
private companies, so exempting a portion of a project's value
from the property tax creates a competitive advantage for
independent power producers. This statute applies to the
residential, commercial, and utility sectors for the life of the
system, although since the property tax valuation is determined
at the time of initial installation the wind exemptions apply to
a decreasing tax as the property depreciates which important to
consider in calculating life cycle costs.

Wind Energy Generation Grants 
Minnesota is unique in offering payments for
energy output, placing a premium on project
production rather than providing investment
credits for rated capacity which may or may
not be fully utilized once installed. As enacted
in MS2000 216C.41, Minnesota offers a 1.5 cent
per kilowatt hour payment for electricity generated
from new wind energy projects less than 2 MW i
n capacity. Qualifying projects will receive payments
for ten years, extending beyond the current eligibility
expiration date of January 1, 2005. Projects will be
admitted to the program on a first come, first served
basis until new wind capacity installed under the program
statewide totals 100 MW. 

Legislators recognized that the state mandate for
Xcel Energy (formerly NSP) to build or purchase 400 MW
of wind power by 2004 and an additional 400 MW by
2013 would stimulate large, cost-competitive wind projects,
and wanted to launch a program that would stimulate
dispersed, locally-owned projects as well. This grant
program was initiated with the goal of establishing
infrastructure to support small-scale wind development.
The first projects admitted into the program were owned
by Moorhead Public Utility and Great River Energy. 

Minnesota's production credit roughly mirrors the federal
 renewable energy production incentive (REPI) that
provides payment of 1.5 cents per kilowatt hour
(adjusted for inflation) for electricity produced
from wind and closed loop biomass. Minnesota's
grant program is available for commercial, industrial,
residential, nonprofit, utility, and tribal council sectors.
The incentive payment is a direct, quarterly payment sent
by the state, regardless of tax liability. 

Wind Energy Equipment Sales Tax Exemption 
Under MS2000 297A.25-68&72, wind energy equipment
as well as all materials used to manufacture, install,
construct, repair, or replace the systems are exempt from
Minnesota state sales tax if they are used as an electric
power source. 

For more information on state wind incentives, contact: 

Minnesota Department of Commerce Energy Division
85 7th Place E., Suite 500 
St. Paul, MN 55101-2198 
Phone (651) 297-1178 Fax (651) 297-7891 
Toll Free (800) 657-3710 (MN only)
Lise Trudeau: Engineer,
Renewable Energy and Advanced Technologies 
Email Energy.Info@state.mn.us  
Web: http://www.state.mn.us/portal/mn/jsp/content.do?subchannel=-536881511&id=-536881350&agency=Commerce   

Value-Added Stock Loan Participation Program
This low interest loan program, which is
administered by the Department of Agriculture
through the Rural Finance Authority, was created
in 1994 as MS2000 41B.046 to assist farmers wishing
to buy into wind generation cooperatives. Under
current rules, the maximum project size is 1 MW,
and the RFA provides up to $24,000 and 45% of
the loan principal over 8 years. As a "participation loan,"
individual financial institutions issue loans with the
RFA subsidizing the interest rate, with resulting
rates averaging 4%. The program is funded through
a revolving account and is available for residential and commercial sectors. 

Agricultural Improvement Loan Program for Wind Energy
The Minnesota Department of Agriculture administers
a low-interest loan program through the state's
Rural Finance Authority (RFA) to provide loans to farmers
to improvements to or additions to permanent facilities,
up to 45% and up to $100,000 of the loan principal with
payment terms up to 10 years. Wind energy conversion
equipment was added to the legislative definition of
agricultural improvements (MS2000 41B.043) in 1995.
Like Minnesota's Stock Loan Program, this is a
"participation loan," whereby the loans are made by
individual financial institutions working with the RFA.
The Rural Finance Authority has a Master Participation
Agreement with 365 financial institutions throughout
the state, which governs the responsibilities of the
various parties in such participation loans. 

For more information on state loan programs, contact:

Minnesota Department of
Agriculture Rural Finance Authority
90 West Plato Boulevard
St. Paul, MN 55107-2094
Phone (612) 297-3557
Fax (612) 296-9388
Wayne W. Marzolf
Email Wayne.Marzolf@state.mn.us 
Web www.mda.state.mn.us/AgFinance/stockloan.html  and www.mda.state.mn.us/AgFinance/improvement.html 

Green Pricing Requirement
Minnesota's 2001 Omnibus Energy Bill (SF 722),
requires electric utilities in the state to offer
customers the option to purchase power generated
from renewable sources or "high-efficiency,
low-emission distributed generation, such as
fuel cells or microturbines fueled by a renewable
fuel." The legislation sets a non-binding goal for
utilities to obtain at least 10% of the energy
supplied to retail customers from renewable
sources by 2015. Rates charged for the offerings
must be based on the difference between the cost
of the renewable energy and the same amount of
nonrenewable energy. Utilities may generate the
renewable energy or purchase credits from a renewable
energy provider certified by the Public Utilities
Commission. 

For more information contact: 

Minnesota Public Utilities Commission 
121 E. 7th Place, 3rd Floor 
St. Paul, MN 55101 
Phone (612) 296-7124
Fax (612) 297-7073
Susan Mackenzie
Email: Susan.Mackenzie@state.mn.us 

Additional information can be found at
AWEA's inventory of state incentives for wind.  http://awea.org/

2007 Minnesota Statutes