WASHINGTON -- Geronimo Wind Energy recently won regulators' permission to build two wind farms in Minnesota.
What happens next for the ventures depends partly on the political winds in the nation's capital.
Right now, those winds seem to be blowing in the wrong direction for the projects. With the U.S. Senate and House struggling to strike a deal to avoid a fiscal cliff of automatic spending cuts and tax increases, chances worsen for extending a federal renewable energy production tax credit that expires Dec. 31.
Without the credit, experts believe investors will be reluctant to put money into building wind farms, customers will be leery of signing long-term contracts to buy electricity from them and companies making parts for giant windmills will go out of business in states like Iowa, Colorado and Minnesota.
Rep. Collin Peterson, D-Minn., favors extending the production tax credit, known as PTC. But he struggles to find a scenario in which a majority of his colleagues in the Republican-controlled House will agree.
"Wind energy is way down the list of priorities [of tax breaks] for extensions," Peterson said. "I just don't see how this gets done."
Among those who don't support the extension is Minnesota Republican Rep. John Kline. His spokesman, Troy Young, said that while the original intent of the program was to increase renewable energy production, Kline is concerned about extending programs that artificially drive up demand.
After 20 years of federal support, Young said, wind should be able to stand on its own.
None of this talk is good news for folks like Betsy Engelking, Geronimo Wind's vice president. "Having it all tied up in the fiscal cliff makes it more uncertain for us," she said.
And, added Joe DeVito, a Minneapolis-based vice president for RES Americas, a unit of a large international wind developer, "uncertainty means nothing happens."
The production tax credit gives wind power investors a 10-year subsidy on a wind farm's output that's roughly equivalent to 30 percent of a project's original cost. The tax credit has existed, off and on, for two decades, helping to build an industry that powers more than 13 million U.S. homes.