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Wind energy: Boom sputters as industry tax credit is set to expire

Congress has so far not extended the tax credit for wind energy, resulting in the layoffs of thousands of workers. Communities that a few years ago were elated to attract a promising new industry are left wondering what will the future bring.

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Congress has renewed the credit 10 times since it was first offered in 1992. But three times it has allowed the credit to expire before renewing it, resulting in a sharp though temporary drop in new wind development. The American Wind Energy Association insists that the industry still needs the credit, although earlier this month it proposed phasing the credit out over the next seven years.

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For workers, the wind industry has offered the kind of well-paying blue-collar jobs that are growing increasingly scarce in American manufacturing. Two-and-a-half years ago, Jerry Limbeck found “a pretty decent job” making turbine blades at the Vestas plant in Windsor, Colo. When Vestas let him go in October, he was earning $18 an hour, plus benefits. It will be hard to find a job like that again, Mr. Limbeck says.

“There are a lot of little jobs, anywhere from $7- to $10-an-hour jobs, around the holidays,” he says. “As far as a good career, I don’t think there’s too many. I haven’t found them yet.”

The lull in the wind industry is also a blow to communities that had fought hard to attract companies, often competing fiercely against other communities in other states and triumphing only after granting generous tax breaks and other amenities.

“We were kind of shocked,” says David Razo, mayor of Hutchinson, Kan., where Siemens has laid off half a workforce of 300 at a factory making nacelles, the part of the wind turbine that contains the generator. “It took an awful lot” to get Siemens to come to Hutchinson, Mr. Razo says, including extending a railroad spur to the plant.

For Fort Madison, a town of 11,000 that sits on a wide bend of the Mississippi River in southeastern Iowa, the opening of a Siemens plant in 2005 could not have come at a better time. A pen factory that had operated in the city since the beginning of the 20th century had shut down, with a loss of 200 to 300 jobs. Not long after, 500 more jobs disappeared when a company that made trailers for tractor-trailer rigs closed.

Tim Gobble, executive director of Fort Madison Partners, an economic development group, recalls “the excitement that something new was coming after four years of nothing.” The excitement only grew as the Siemens plant expanded faster than local officials expected, quickly becoming the city’s largest employer.

Now the same officials are trying to find new jobs for Siemens workers. Last month, Iowa Workforce Development held a job fair for them at a Comfort Inn in Fort Madison.

“They have to make a decision,” says William Stuflick, regional manager of the agency. “‘Do I take a job that pays less an hour, or hold out and wait for something better?’”

William Davis, who lives a few miles downriver in Warsaw, Ill., and retired from Siemens in October, says the poor local economy added to his co-workers’s distress at losing their jobs. Lee County, long one of Iowa’s most economically depressed counties, has a jobless rate of 7.9 percent, a full three points above the state average. Mr. Davis says he doesn’t know any workers who have found new jobs, “except at temp agencies.”

Some workers who lost jobs in wind manufacturing hope to get them back once the industry recovers. “I can’t see wind energy just going by the wayside,” says Limbeck in Colorado.

Derr isn’t thinking that way. He signed a separation agreement with Siemens, closed out his 401(k), and has been filling out applications. He’s looking again for that “career” job.

“I could get a job for eight bucks an hour, driving a delivery van around town, but that’s not going to pay my bills,” he says. At the same time, he adds, “I’d hate to guess how many people are looking for jobs around here.”

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