MidAmerican Energy's Wind XI: It's legal but is it ethical?
Recently, the Iowa Utilities Board approved MidAmerican Energy to add another 1,000 industrial wind turbines to our state. Iowans were told that MidAmerican is investing $3.6 billion into the state but this is misleading. At the federal level, the wind production tax credit and double-declining accelerated depreciation can pay for two-thirds of a wind power project. Additional state incentives, such as guaranteed markets and exemption from property taxes, can account for another 10 percent of project costs. According to data from Subsidy Tracker, a database maintained by Good Jobs First, a Washington, D. C.-based organization that promotes corporate accountability, the total value of the subsidies given to the largest wind energy companies, which includes MidAmerican, is now $176 billion.
MidAmerican claims no new rate increases will occur to support its 1,000-turbine wind factory, but that’s because they already raised rates from 2014-2016 through a three-year annual increase plan. It’s astonishing the Iowa Utility Board allowed such an increase given the cost for electricity in the U.S. has remained relatively flat due to the cheap supply of natural gas and stagnate demand because of slow economic growth and widespread use energy-saving technologies. While the rest county has enjoyed stable electricity costs, Iowans are paying more.
Data from the U.S. government’s Energy Information Administration, shows Iowa’s residential electric rates increased 18 percent from 2008-2015 while the national residential electric rates averaged 7 percent increase. Iowa median household income from 2008-2015 increased a measly 1.5 percent. This mean’s Iowa electric rates are growing 12 times the rate of growth in the typical Iowa household income during this period. Considering most of the power and profits from Iowa wind farms do not remain in the state, this electricity cost to household income ratio is a staggering burden being shouldered by Iowans. The economically challenged in Iowa are especially disadvantaged with what is happening to our electricity costs and now they are told to expect to pay more for heat this winter.
It’s also a stretch to say MidAmerican is investing in Iowa when virtually all the power generated by these machines and all the profits go out of state. The Midcontinent Independent System Operator which operates the power grid to which Iowa belongs reported that 24 percent of its energy came from wind in 2015 but this was distributed among 15 states and the Canadian province of Manitoba. MidAmerican’s parent company, Berkshire Hathaway (where the profits go) is based out of Nebraska. The Branstad administration argues the wind project creates jobs for Iowa but fails to mention most of the jobs are temporary construction gigs, most of it handled by imported labor from the wind developer. A typical large wind facility requires just one maintenance worker. Of the 200 workers involved in construction of the 89-turbine Top of Iowa facility, only 20 were local; seven permanent jobs were created. The average nationwide is one to two jobs per 20 MW installed capacity.
Wind turbines are known within the energy industry to be grossly inefficient and the cost of the power they generate is incredibly expensive compared to other sources of energy minus government subsides. So why build such massive wind farms when the energy they generate is inefficient, not needed, and very costly? Because it’s a gold mine for MidAmerican as the new Wind XI project could deliver $1.8 billion in tax credits over the next decade. That’s a winning strategy considering the company invests virtually none of its own capital to earn these billions. If MidAmerican is winning, then who is losing?
Iowans are losing. Our electricity costs are rising and our beautiful prairie views are being exploited. In the first six months of 2016, Iowa’s electricity costs rose 3 percent while they decreased 0.7 percent nationally. Our clean country views are being polluted with an endless muck of industrial machinery. It’s interesting that Berkshire Energy has not deployed thousands of wind turbines in its own backyard, its home state of Nebraska. Another loser is our wildlife, mainly birds, bats, and eagles, are being wiped out to support a billionaire’s tax scheme.
It is a scheme. MidAmerican’s uber-boss, Warren Buffett, acknowledges wind energy for what it is when he told his investors in 2014 that: “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate ... We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” It is all perfectly legal but is it ethical?
Avian are perhaps the biggest losers of the wind-tax program. Wind energy lobbyists in the U.S. are fighting the public release of bird kill data by industrial turbines but on Jan. 12, 2012, at the First Scientific Congress on Wind Energy and Wildlife Conservation in Jerez de la Frontera, Spain, the Spanish Society of Ornithology made public its estimate that, based on data collected near Spanish wind farms, that yearly, Spain’s 18,000 wind turbines may be killing 6 to 18 million birds and bats. The average per turbine comes down to 333-1,000 deaths annually. The report also stresses that even a small incremental mortality for bird species whose populations are not abundant and those who are slow-reproducers may drive them to localized extinctions.
Eagles and bats are very slow reproducers; it can take decades to replace a single loss. Assuming the avian kill rate in Iowa is like what ornithologists observed in Spain, our projected 5,000+ turbines will kill 1.7-5 million avian per year. It’s not just local birds that turbines are killing. A recent study by Purdue University showed that about 25 percent of dead birds/bats/eagles come from nests located as far as 100 miles away from a wind farm. Iowa is in the direct path of two of North America’s major migratory flyways. In America today, the most likely place for a person to find an eagle carcass is at or near a wind farm. Are the tax advantages for a billionaire justified by the millions of avian deaths that will occur in our state over the next 15-20 years? Is the massive buildup of wind turbines necessary when data shows they have only a minuscule effect on reducing carbon?
While wind lobbyists use climate change to validate entry into sensitive or inappropriate landscapes, the scientific reality supported by experts, proves wind energy does not have a meaningful impact on climate change. Nationally, despite receiving hundreds of billions of dollars in tax subsidies for over two decades, industrial wind contributes only 2 percent of American’s energy consumption. The Iowa Wind Energy Association’s assertion that Iowa’s 3,200 turbines remove 8.7 million metric tons of carbon sounds impressive until it is applied to the global scale — it represents 0.087 percent of the global carbon output. Climate experts argue that wind energy will never solve the carbon problem.
Knowing all this, why does our governor appease these tax-driven programs by MidAmerican Energy? Terry Branstad served on MidAmerican’s board of directors starting in 1999 and some of his largest political donors are from the wind energy sector. His ties are so close to MidAmerican that he fired Iowa Utilities Board chair Sheila Tipton when she questioned MidAmerican’s strategy in the spring of 2015 as being unfavorable to Iowa ratepayers. It is unclear from media reports when Governor Branstad stepped down from MidAmerican’s board or if he did.
Iowans who sincerely care about the greater environment and ensuring affordable electricity for all our citizens should see beyond the industrial wind marketing machine, they should see beyond political special interests, and start demanding an end to our state’s manipulation by this industry. Wind XI is unethical because the means do not justify the ends. Increased costs to ratepayers, lack of need, the massive killing of avian, minuscule carbon reduction, and the fact that nearly all the energy and profits will not remain in Iowa do not justify the tax advantages gained by Nebraska-based Berkshire Hathaway.
• Terry McGovern is a retired U.S. Air Force Lieutenant Colonel and professor of management at Clarke University in Dubuque. These comments represent his personal views and not necessarily those of his employer. More information: www.facebook.com/groups/Iowawindaction