In December, MidAmerican Energy Holdings Co. placed the world's largest-ever order for onshore wind turbines, estimated at $1 billion for 448 units totaling 1,050 MW, to be installed on five Iowa wind farms. Despite its size, the large capacity is not unusual for Iowa, which already boasts 5,571 MW of installed wind capacity, generating 27.4% of its electricity mix.

Amid growth in wind-generation nationwide, Iowa's is the highest proportion for any state. According to the Energy Information Administration, some 5.7% of total U.S. generating capacity—61,108 MW— now comes from wind. In 2012 alone, a record-setting 13,131 MW of wind-energy generation was installed in the U.S., the American Wind Energy Association (AWEA) reports. More than 12,000 MW were under construction in 2013, more than ever in history. But the boom times may be ending. Total wind power installations for 2013 were just 1,084 MW, down 92% from the 2012 level. The reason why goes to the heart of one of the greatest hindrances to the U.S. wind industry: inconsistent, start-and-stop regulation.

Chaining the Wind

Congress has kept the wind industry on a short leash, renewing the federal production tax credit (PTC) of 2.3¢ per kilowatt hour for wind energy for just one or two years at a time since 1999. As the PTC was expiring again at the end of 2012, it was extended for another year, with modified eligibility criteria. For example, a project had to begin construction by the end of 2013 and be in service by the end of 2015. With the expectation the PTC would go away in 2014, developers spent most of 2013 planning and financing their projects. As a result, more than 10,900 MW of the 12,000 MW now in construction were started during the fourth quarter of 2013.

Wind energy currently generates nearly 30% of MidAmerican Energy's total owned generation. Completion of the $1.9-billion, five-site expansion announced in December, which MidAmerican calls "Wind VIII," will boost that to about 39%. MasTec Inc.'s subsidiary Wanzek Construction already has completed one 44-MW expansion and now is working on a 250-MW wind farm for the program. Mortenson Co. is constructing the other three projects: a 500-MW plant, a 138.6-MW plant and a 117-MW plant, all in Iowa. Mortenson's contract on the 500-MW Highland project is typical: engineering, procurement and construction of access roads, foundations and electrical systems, together with turbine erection and tower wiring. Construction costs are not available.

"In the past four years, the cost of wind power has come down 43%," says Tim Maag, vice president and general manager of Mortenson's wind-energy group. "From what we're seeing, wind is now competitive with any form of new generation that is constructed." Where a wind resource is available, the levelized cost of electricity of a PTC-eligible wind project is the lowest for any new generation, provided dispatch- ability is not part of the equation, says Bryan Uhlmansiek, project manager for Black & Veatch.

MidAmerican is not trying to meet a state renewables portfolio standard (RPS) obligation. Iowa has long since blown past the goal set in 1983 for investor-owned utilities to buy 105 MW of wind-generated electricity. The goal was officially declared met in 2007, and no new goal has been set, says an Iowa Utilities Board spokesman.

Congress may be ambivalent about wind, but Texas has gone all in. Transmission between wind-rich areas and load centers was lacking, so wind-farm developers would not build, says a spokesman for the Public Utility Commission of Texas. For their part, transmission owners required a return on equity to pay for construction of new transmission lines.

To solve the chicken-or-egg problem, PUCT designated zones ripe for wind development, and, in 2005, the Legislature approved cost recovery for transmission from Competitive Renewable Energy Zones (CREZ) in central and west Texas to the major urban centers. In December 2013, the last of 186 CREZ projects was completed—345-kV transmission lines and system upgrades, with a total cost of $6.9 billion—opening the way to deliver some 18,500 MW of power to the eastern part of the state.

The CREZ model succeeded, in part, because the entire system operates in the same state with a single legislature and regulator. The Midcontinent Independent System Operator is pursuing a similar course with 17 "multi-value projects" (MVPs) over a nine-state area, from the Dakotas to Ohio, with an estimated cost of $5.2 billion. The projects—16 transmission lines rated at 345 kV and one at 765 kV—are planned to be in service between 2014 and 2020 and, as in Texas, link wind-rich, infrastructure-poor with load centers.