Those who favored the extension commended Congress and the White House for agreeing to renew the tax credit Tuesday as part of the deal to avert the “fiscal cliff.” The extension applies to any project that begins construction before the end of the year.
It also will apply to several other renewable energy sources, including geothermal and biomass.
The extension comes after Vestas cut its Colorado workforce from 1,700 to 1,200 in 2012. The company laid off about 300 employees in its Windsor and Brighton factories while it cut hours of others partly because of Congress’ inaction on the wind credit last year.
Vestas now employs 1,100 employees at its four factories in Brighton, Windsor and Pueblo.
On Wednesday, Windsor Mayor John Vazquez said he was glad that lawmakers passed the extension.
“The majority of (Vestas) employees live in Weld and Larimer counties, and I think for our region, it’s important that that employment base becomes stable,” he said. “I think that’s something that the tax credit’s going to bring.”
Vestas did not say whether it would rehire employees it laid off or restore others workers’ hours.
“We can’t really speculate on future employment levels,” spokesman Andrew Longeteig said.
Vestas said in its third-quarter earnings statement that it would reduce its workforce to 16,000 by the end of the year. That amounts to another 3,000 job cuts on top of the 3,700 it already had announced.
Stacy Johnson, economic development manager for the town of Windsor, hoped that the tax-credit renewal meant increased stability for Vestas’ workforce.
“Unfortunately, I don’t see it as increasing the workforce or bringing back the people they laid off,” she said.
The one-year extension was the “minimum” Congress could have passed vs. other proposals Johnson had seen, she said.
Efforts by the town of Windsor to get the tax credit renewed once again will continue, she added.
Projects completed after this year will qualify for the tax credit, but the wind industry would have preferred a longer extension.
“We still think a more stable policy framework is needed to ensure a strong wind industry in this country,” Longeteig said.
Gov. Bill Ritter, director of CSU’s Center for the New Energy Economy, called the extension “limited good news.” He believed the extension would keep Vestas in Colorado this year.
The wind industry had asked for a tax credit that would run until 2018 and had pledged to end the subsidy after that, Ritter said.
“That didn’t happen, so we’re back in this boom-and-bust cycle of wind manufacturing that’s driven by this tax credit,” he said.
The key difference between the new tax credit and the previous one is that companies could not take advantage of the previous credit unless a project was distributing electricity into the grid, he said. Under the new tax-credit scheme, a company can qualify for the credit as long as wind-project construction begins by Dec. 21.
Colorado U.S. Sens. Michael Bennet and Mark Udall pressed for renewal of the credit throughout 2012.
“It was unfortunate that it took Congress so long and so many rounds of layoffs to join me in this bipartisan cause, and I wish that Congress could have provided the industry with more certainty through a longer extension,” Udall said in a statement Wednesday. “But this is a step in the right direction.”
Environment Colorado, a Denver-based conservation group, believes the credit should be extended permanently, but said a one-year extension is better than it appeared.
“A one-year extension doesn’t sound that significant, but I think it will prove to be very beneficial to the wind industry,´ said Margaret McCall, field associate for Environment Colorado.