The tax breaks, ranging from charitable contributions to corporate research, would be extended through 2015 as part of a sweeping proposal released by Sen. Ron Wyden, an Oregon Democrat who chairs the Senate Finance Committee, and the panel’s top Republican, Sen. Orrin Hatch of Utah.
While the initial draft does not include production tax credits (PTC) for wind, geothermal, hydroelectric and other renewable power sources, a Wyden aide and officials representing the wind industry expected the measure to be included when the committee debates the bill Thursday. The draft included measures that were largely not controversial.
Keith Chu, Wyden’s aide, said the wind credit’s exclusion from the tax extenders proposal released Tuesday doesn’t mean it’s dead. The early plan “represents things that were agreed on by both Wyden and Hatch,” he said.
“Wyden supports clean energy and extending the PTC, and I would expect that the PTC extension comes up at the markup on Thursday,” Chu said.
Wyden has said he favors renewing the production tax credit as part of a broader tax-reform package. But if an overhaul isn’t possible this year, he has said he will find a way to renew federal tax incentives for renewable energy sources.
Iowa Sen. Chuck Grassley, an ardent supporter of the tax credit, said there was “no fair rationale” for leaving wind out of the proposed package.
“There’s a significant amount of bipartisan, bicameral support for the wind tax provisions,” he said. Grassley said he would offer an amendment to renew the wind energy subsidies this week.
In March, Grassley was among 26 senators and 118 House members who encouraged leaders in Congress to extend the credits that help create jobs and promote renewable energy. The success of a similar proposal in the House is uncertain as the Republican-led chamber has focused on making permanent changes to the country’s tax code.
In Iowa, a total of 16 wind projects were under construction during the fourth quarter of 2013. Most are small projects with the exception of four by MidAmerican Energy Co., which announced last May it would boost wind generation, consisting of up to 656 new turbines, by the end of 2015. Iowa generates 27 percent of its electricity by wind power, the most of any state.
The credit that expired at the end of 2013 provided a 2.3-cent-per-kilowatt-hour benefit for electricity generated from utility-scale turbines during the first 10 years of a facility’s operation. Renewable energy projects that started construction before Dec. 31, 2013, were eligible for the tax credit. The wind tax credit has been in place since 1992, and has been extended nine times.
Peter Kelley, vice president of public affairs with the American Wind Energy Association, said he was optimistic the wind credit would be added by the Senate committee. “Ultimately, on both sides of the aisle they know this is a must-have because it means jobs and economic development back home,” he said.
The American Wind Energy Association said the bipartisan support for wind energy reflects that all 50 states have either utility-scale wind farms or factories, representing 70 percent of congressional districts.
The Senate Finance Committee draft released Tuesday did include two-year extensions of tax credits for cellulosic and biodiesel.
Facilities producing cellulosic biofuel could claim a $1.01 per gallon production tax credit while biodiesel makers would receive a $1 a gallon subsidy, as well as a $1 per gallon credit for diesel fuel created from biomass.