Wind on the Wires1 - Smart Grid (R) Evolution: Electric Power Struggles - page 149

promote wind development began in the 1980's, when Iowa passed a 1983 law requiring
investor-owned utilities to buy 105 MW of wind power. The largest wind installation in
the mid-1990's after the California crash was in Minnesota, where the state legislature
brokered a deal with Northern States Power (NSP, now Xcel Energy). This deal allowed
the utility to store nuclear waste in dry casks near one of its nuclear power plants as
long as Xcel installed an additional 425 MW of wind power, with another 400 MW
required by 2012. The rise of state RPS policies after 2000 and the on-again, off-again
federal Production Tax Credit (PTC) also helped to promote wind development across
the Upper Midwest. In the mid-2000's “Green-Blue” political coalitions emerged, linking
the environmental movement and labor and passed RPS in many Upper Midwest states
with the hope of simultaneously promoting rural and blue-collar economic development.
In Iowa and Minnesota, wind development for rural economic development linked the
environmental community and rural lawmakers, who are often at odds with one another on
other issues. In North Dakota, the wind lobby had to compete with the lignite coal lobby,
and the resulting Renewable Portfolio goal was weaker than in other Midwest states, as it
is not binding. These initiatives initially enjoyed strong bipartisan support as Republican
lawmakers like Minnesota's Governor Tim Pawlenty played a key role in supporting new
RPS legislation. Although the situation changed after 2009, bipartisan support was crucial
for passing this legislation.
Electricity markets and planning in the Upper Midwest are coordinated by the
FERC-authorizedMidcontinentIndependentSystemOperator(MISO).By2013,alleleven
MISO states in the Upper Midwest, with the exception of Kentucky, had passed a RPS
or goal and installed more than 12,000 MW of wind power, with 25,000 MW committed
under state RPS policies. Most of the RPS policies in MISO states allowed both instate
and out-of-state generation to count toward the RPS requirements. The exception was
Michigan, which required that renewables be generated instate or owned by a utility
operating in Michigan. In Illinois, only investor-owned utilities were obligated to
participate in the RPS. In addition to RPS, states have used other policies to promote
wind development. Some of the other state-level policies include corporate income tax
credits to allow for accelerated depreciation of wind-related assets, special grant programs,
low-interest agricultural loan programs, property tax exemptions, sales tax incentives,
easements, green pricing programs, net metering, and public benefit funds.
Additionally, the Midwest Renewable Energy Trading System allowed for states (except
Michigan) to comply with their state's RPS by purchasing Renewable Energy Credits
(RECs). These RECs could be associated with renewable energy produced outside of the
state boundaries. For example, a Minnesota-based utility could purchase RECs from wind
produced in North Dakota or a utility in Wisconsin could purchase RECs from wind