United States

United States

Tax credit crunch could kill Colorado 162 MW Lamar project

The groundwork needed to start building a 162 MW wind farm near Lamar, Colorado, will likely take the rest of the year to complete, pushing construction into 2002 -- which could kill the project. Colorado regulators ordered utility giant Xcel Energy to include the Enron Wind proposal in its resource portfolio last month (Windpower Monthly, March 2001). The economics of the project are dependent on wind's Federal Production Tax Credit (PTC), which adds about $0.015/kWh to the selling price, says Enron Wind president Bob Gates. The PTC expires December 31, and although the US Congress is considering to extend it, Lamar and other projects that will not be finished by that date will get sent back to negotiations if the extension attempt fails. Gates says Enron and Xcel are working on a power sales agreement, and it appears the utility is determined to make this project work. But Enron is finding that the interconnection substation and switching equipment will take as many as ten to 12 months to acquire. "The practical reality is that we won't start construction until next year," Gates says.

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