Iowa's wind power surging

Iowa has become the second-largest producer of wind power in the U.S., and some credit an aggressive and supportive role played by local government.

That support is seen in numerous ways: Wind-energy producers and equipment makers enjoy state tax breaks, and projects of 25 megawatts or smaller don't need to be certified by the utilities board. In addition, producers know ahead of time that they will be able to recover their costs from customers, which makes them more likely to invest. Iowa counties, meanwhile, appreciate the revenue and the jobs that wind farms produce, and have few zoning regulations for wind turbines.

"Iowa shows that concentrated and consistent leadership from governors and consistent support from the state regulatory commission can get a lot done," says Hans Detweiler, director of state policy at the American Wind Energy Association, or AWEA, a trade group based in Washington, D.C.

Indeed, as more states and the federal government seek to encourage more production of renewable energy, Iowa may point the way.

"There's very little regulation," says Terry Monson, who deals with permitting and legal work at independent power developer Renewable Power Markets Access Inc., based in Juno Beach, Fla. "It's very expeditious." Mr. Monson's company has eight wind projects established or under development in Iowa.

Flat Is Good

Nature and geography have lent a hand, too, of course.

Iowa may point the way as more states seek to encourage production of renewable energy
."First, it's relatively flat, making it easy to build," says Scott Jacobson, managing director of wind power finance at Iberdrola Renewables SA, a Spanish engineering and renewable energy company that entered the state in 2003 and now has more than 300 megawatts of local wind projects. Iowa is also "relatively rural, making land control easy," Mr. Jacobson says.

What's more, winds there are strong, and the state lies in an enviable position on the grid—close to load centers like Chicago and Milwaukee.

Last year, Iowa added 1,600 megawatts of wind capacity, jumping ahead of California for second place behind Texas. At the end of the second quarter of 2009, Iowa had 3,043 megawatts of total wind capacity, compared with 8,361 megawatts in Texas and 2,787 megawatts in California, according to the wind-energy association. Iowa's wind now powers about 15% of the state's electricity consumption, which represents a lofty goal for many other states.

The so-called Corn State began promoting renewable-energy sources as early as 1978, when, in response to the oil shock, it passed a property-tax exemption for wind, solar and other types of generators whose electricity was used on site. Then, in 1983, the state adopted the first renewable-energy mandate in the U.S., requiring that its investor-owned utilities draw power from 105 megawatts of renewable generation by 1990.

That's not much by today's standards, but it got the ball rolling. During the 1990s, Iowa added a few megawatts of wind installations a year, until 1999, when the total jumped to 232 megawatts installed, thanks largely to new federal tax credits and the arrival of powerful new European turbines. Iowa met its renewable-power mandate goal in 1997.