The wind-energy industry asked Congress to extend a tax break for six years, a time frame it said was long enough to cut costs and short enough to ease fears the credit will become a permanent part of the tax code. The American Wind Energy Association, whose members include General Electric Co. (GE) and the U.S. unit of Siemens AG (SIE), offered the proposal yesterday in a letter to Senator Max Baucus, a Montana Democrat and chairman of the Finance Committee, and other members on the tax-writing panel.
The wind industry today is calling for its key tax credit to be phased out over the next six years — putting detail for the first time to its long-standing position that the credit will not be needed forever. The proposal from the American Wind Energy Association, outlined in a letter to lawmakers, could aid efforts to extend the wind production tax credit beyond its scheduled expiration at the end of this year. AWEA has long said it would not need the credit forever but was facing growing calls from Capitol Hill to spell out exactly what that meant. Until last night the group had not precisely detailed how much longer it would be needed or how a phaseout could be structured.
The wind industry is trying to break a Capitol Hill logjam by backing a phaseout of taxpayer support as it seeks to prevent an immediate cut-off of tax credits. The American Wind Energy Association (AWEA) proposed Wednesday extending the 2.2-cent per kilowatt-hour credit for wind power production by one year, then phasing it out through the next five.
The Omaha Public Power District is looking to nearly double its wind energy producing power with a new project near Elgin, Neb. On Thursday, the district’s board will vote on the purchase of 200 megawatts of energy from the Prairie Breeze Wind Farm. The 118-tower wind farm, located in Boone and Antelope counties, is scheduled to open in January 2014 and will produce enough electricity to power 59,000 homes. OPPD would purchase the power from the company building the farm, the Chicago-based wind development company Invenergy.
Wind energy enthusiasts in Texas are beginning to think the time has come to look beyond federal support for their industry, turning their attention instead to Austin and other regional state capitals. With the survival of the federal production tax credit (PTC) hanging in the balance, new investment in towers and turbines in the nation’s largest wind energy state is coming to a screeching halt. Ongoing projects are scrambling to be completed by the end of this month to make them eligible to receive the tax credits for 2012, but new projects aren’t happening, according to the offices of the Texas Wind Energy Clearinghouse in Sweetwater.
In renewable energy, just as in real estate, the game is “location, location, location.” And Tenorio and his neighbors found themselves in the wrong place at the wrong time. Their efforts to secure a link to the electric grid fizzled this year when the Federal Energy Regulatory Commission in Washington, D.C., ruled that the proposed line they needed couldn’t proceed until other projects were built.
Opponents of a key renewable tax credit are urging lawmakers whose states do not require renewable energy to oppose an extension of the credit, arguing it leads their constituents to subsidize activity in other states. The letter comes as Congress continues to deliberate the fate of the wind production tax credit, which is set to expire at the end of this year. Supporters remain optimistic the credit will win an extension as part of a “fiscal cliff” deal, but it is attracting intense opposition from fiscal conservative groups that argue it is too costly. Six conservative groups, including the American Energy Alliance, Heritage Action for American and the Competitive Enterprise Institute, today are sending a letter to 158 members from states without renewable portfolio standards urging them to let the credit die.
While wind has grabbed most of the attention in the push to extend the production tax credit, other renewable energy industries are lobbying in support of a small but significant tweak to the credit’s eligibility requirements endorsed by a Senate committee earlier this year. Representatives of the biomass, hydropower, geothermal and waste-to-energy industries wrote President Obama applauding his support for the PTC.
It’s looking less and less likely that Congress and the White House will reach agreement on the year-end “fiscal cliff” before Christmas, leading to predictions Washington is in for a long December waiting for a resolution. Senate Majority Leader Harry Reid (D-Nev.) continued to blast Republicans over the fiscal cliff negotiations — which cover a suite of impending tax hikes and across-the-board spending cuts lawmakers and President Obama would like to avoid, although they have not agreed on how. And he doused expectations that a resolution would present itself in the next two weeks.
They may not be able to do much to influence the “fiscal cliff” negotiations that remained at an impasse last week, but wind energy supporters are continuing to pound the halls of Congress with a somewhat nuanced request that will have an outsized influence on the state of the industry. The ask all year has been for an immediate extension of the wind production tax credit, which expires Dec. 31 without congressional action. But at this late stage of the game, simply changing the date in existing law won’t be enough to do much good for the industry, supporters say. Instead, they are focused heavily on persuading House Republicans to accept a modification to PTC eligibility requirements that already has won bipartisan backing from the Senate Finance Committee.