Idaho energy rebate could be victim of own success

[Fledermaus]

BOISE, Idaho (AP) — Wind developers who are pushing to extend a tax break that has helped bolster their industry in Idaho suffered a blow because state officials say the success of the program is undermining efforts to balance the budget.

Back in 2005, when lawmakers passed a 6 percent sale tax rebate for alternative energy developers, lawmakers estimated it would cost Idaho just $2.13 million annually......


With the end of the rebate approaching, claims are coming in significantly higher than expected — nearly $9 million in January alone, Hammon said.

The tax rebate allows alternative energy developers to recoup 6 percent of the sales and use taxes they pay for purchases of machinery and equipment used to generate energy.

The estimated $47 million hit to Idaho's budget means that developers are investing some $783 million on machinery and equipment to produce electricity.

Rich Rayhill, of Ridgeline Energy, a company that's building an 80 megawatt wind farm near American Falls, said state officials who focus on the budget hit ignore the economic upside of wind projects: These installations, in addition to generating clean energy, also produce income tax revenue from workers, as well as property taxes that keep counties and school districts running.....


When the measure was passed in 2005, wind energy in Idaho produced about 300 kilowatts.

By the end of this year, renewable power generation, mainly from wind, is expected to reach 544 megawatts.

Idaho Power claims it could have 1,100 megawatts of wind generation on its system in just a few years, as developers have been lured here by not only the state tax rebate but generous federal incentives like U.S. Department of Treasury cash grants.

http://www.bloomberg.com/news/2011-01-28/idaho-energy-rebate-could-be-victim-of-own-success.html