Kitzhaber urges Congress to renew wind energy tax credit

Source: Written by Raju Chebium, annett Washington Bureau • Posted: Thursday, November 15, 2012

WASHINGTON — Gov. John Kitzhaber and a bipartisan group of lawmakers urged Congress on Tuesday to extend production tax credits for the wind-energy industry before the end of the year.

Kitzhaber joined fellow Democratic Gov. John Hickenlooper of Colorado, Republican Govs. Terry Branstad of Iowa and Sam Brownback of Kansas, and Sen. Charles Grassley, R-Iowa, to push for the wind production tax credit to be renewed beyond Dec. 31.

Supporters say Congress must continue to support an industry that produces clean, renewable energy and reduces U.S. dependence on foreign oil. But opponents say taxpayers shouldn’t prop up an industry that long has received support and still produces a fraction of the nation’s electricity.

The wind industry could shed 37,000 jobs if Congress ends the tax credit, according to the American Wind Energy Association, a lobbying group.

Kitzhaber said wind-energy companies have invested more than $4 billion in Oregon since 2007.

Oregon’s wind-energy output is the fourth-highest among states, generating 3,153 megawatts per year — enough to power 770,000 homes, according to the American Wind Energy Association. Projects in the pipeline are projected to produce an additional 14,306 megawatts in the state.

A little more than 7 percent of the electricity produced in Oregon came from wind in 2011, the group said.

“Congress faces a critical test in the next few weeks in determining America’s energy future,” Kitzhaber told reporters at a Capitol Hill press conference via telephone. “Congress should reaffirm its bipartisan commitment to job creation and domestic energy production by renewing the wind energy production tax credit this year.”

The wind production tax credit has been in effect off and on since 1992. The current credit — 2.2 cents for every 1,000 watts of wind energy produced — has been in effect continually since 2005.

Supporters want Congress to extend it for one year at a cost of about $5 billion, Grassley said. A House bill co-authored by Rep. Earl Blumenauer, D-Ore., would renew it for five years.

Grassley said the wind tax credit will be part of a bigger package of research and development incentives that advocates want Congress to approve in the lame-duck session.

With the end of year fast approaching and Congress facing a full workload to avoid sharp tax increases and steep spending cuts, an extension of the wind credit is no sure thing.

“We know this isn’t something that is going to last forever. Wind energy is getting more efficient all the time but we believe there needs to be an extension for a period of time,” Branstad, who chairs the Governors’ Wind Energy Coalition, said at the Capitol Hill news conference.

The prospects for continued federal interest in wind energy will increase next year when Sen. Ron Wyden, D-Ore., becomes chairman of the Senate Energy and Natural Resources Committee.

The Nov. 6 election gave advocates reason to cheer because President Barack Obama supports extending the wind credit, while GOP candidate Mitt Romney wanted to scrap it.

Support is strong in the Senate, which the Democrats control. The Senate Finance Committee included the wind credit in a tax package that passed the panel in August. Grassley and Wyden are members of that committee.

The House, led by Republicans, is less receptive, although the wind lobby is encouraged by the re-election of outspoken Republican supporters such as Reps. Dave Reichert of Washington, Steve King and Tom Latham, both of Iowa, and Sen. Dean Heller of Nevada.

Opponents say the production credit is a waste of taxpayer money.

The American Energy Alliance argued that the wind industry is strong enough to stand on its own and doesn’t need taxpayer support.

Eighty-eight organizations that oppose the wind credit paid for a full-page ad scheduled to appear today in the Washington newspaper The Hill

“Whenever the government protects a particular industry, as it has with wind energy production, the industry tends to remain dependent on it,” according to the ad. “We’re still providing a $5 billion special tax break for an industry that supplies just 2 percent of our power.”