Two years ago, Siemens Energy, with much fanfare, opened a wind power plant in Hutchinson. Since that time, the German company manufactured nearly 950 of the giant 2.3-megawatt nacelles and hubs that sit atop wind-generating towers in Kansas and elsewhere.
According to the Hutchinson News, local and state entities provided Siemens more than $3.22 million in direct cash incentives, as well as free land, a new railroad spur and 10 years worth of tax breaks. It was a lot of money, but it seemed like a good investment in a growing Kansas industry.
Unfortunately, last week, Siemens announced that, because of a downturn in the wind industry triggered by uncertain federal energy policy and tax credits, it would eliminate 885 permanent and temporary contract jobs at its plants in the United States. That includes 256 workers at the Hutchinson plant, more than 60 percent of its workforce.
For a state and nation that is putting so much emphasis on job creation, this is not good news.
The Siemens news drew a mixed reaction from Kansas lawmakers. U.S. Sen. Jerry Moran has been working for months to extend the federal production tax credit on wind energy that is scheduled to expire at the end of this year. He didn’t hesitate last week to point a finger at Washington, saying the unwillingness of the federal government “to craft a comprehensive domestic energy policy” had resulted in the wind industry’s decisions not to make further long-term investments. U.S. Sen. Pat Roberts also has supported the extension of the tax credit.
On the other side of the issue were U.S. Reps. Tim Huelskamp and Mike Pompeo, who favor ending all federal wind energy tax credits. Gov. Sam Brownback took a slightly more moderate approach, saying that he favored the tax credits being renewed but phased out over the next three to four years.
It’s hard to see why elected officials from Kansas wouldn’t support incentives to promote wind power. Kansas is ranked among the top states in the nation in terms of wind-power potential. The state obviously can’t depend exclusively on the wind for power generation, but the wind industry is a growing enterprise in Kansas both for the power it supplies and the jobs it provides.
The Siemens announcement is a huge blow for Hutchinson, but it also draws attention to a broader policy issue that is important to the development of alternative energy sources in Kansas and across the nation. The wind energy tax credit is important to Kansas and it deserves the support of our elected representatives.