Congress may let a key tax credit for the wind industry expire at the end of the year, a move that would be applauded by conservative free market groups, but which the wind lobby says would significantly slow down the industry.
According to a Politico report, tax writers in Congress aren’t currently considering a year-end package to extend tax credits, which would include the wind energy production tax credit (PTC).
The PTC narrowly survived last year. It officially expired for one day before being revived as part of a last minute deal in the fiscal cliff negotiations.
It was a hard-fought victory for the American Wind Energy Association (AWEA), the industry’s chief lobbying group. AWEA spent more than $2.1 million in 2012, a 61 percent increase from the $1.5 million it spent the previous year.
According to reports, lobbyists did most of the heavy lifting last summer when the Senate Finance Committee packed roughly 50 tax credit extensions into a bill, which the committee passed by a 19-to-5 vote. The bill was dead in the water until it was slipped verbatim into the fiscal cliff package, reportedly at the insistence of the White House.
However, there’s been no such activity in Congress so far this year. If the credit is left to expire, Congress may retroactively restore the benefits in 2014. Even then, the wind industry says the lapse would slow construction of new wind farms.
Congress first enacted the wind energy PTC in 1992 and has renewed it seven times since, but the tax credit has faced uncertain fate amid the recent fiscal cliffs that have plagued Congress over the past couple years.
AWEA argues the political environment is creating uncertainty in the industry, leading to a slowdown in new projects.
“We must, as a country, get out of this unpredictable, uncertain pipeline environment,” the association’s CEO Tom Kiernan told Politico Thursday.
The wind PTC faces opposition from fiscal hawks in Congress, free market groups, and an array of energy interests who argue the wind industry should be able to stand on its own after more than two decades of federal support.
Benjamin Cole, the communications director of the American Energy Alliance, an advocacy arm of the Institute for Energy Research, said it was time to take the federal training wheels off.
“It's not an infant industry,” Cole said in an interview. “It's a mature industry. I don't know any start-up that has the resources to commit to permanent lobbying for mandates and subsidies. [AWEA] is playing a big lobbying game at the highest level of power politics.”
Rep. Mike Pompeo (R., Kan.) introduced legislation earlier this year to end all energy tax credits. Pompeo’s bill garnered the support of a host of free-market groups such as Americans for Tax Reform, Club for Growth, Americans For Prosperity, and the American Energy Alliance.
According to one source in the coalition, those same groups will be pushing again to permanently end the PTC over the next two months, except this time they have more organizations and more members of Congress behind them.
Politico also reported that Exelon, one of the nation’s biggest utility owners is pushing Republicans on the House Energy and Commerce Committee to hold a hearing on wind power.
For now, the wind industry has a bit of breathing room, thanks to small change it secured in the tax credit last year. The language of the production tax credit was also changed to allow any project that has begun construction by the end of next year to qualify for the PTC rather than projects operational by the deadline, which was the previous rule.
AWEA did not respond to requests for comment.
As previously reported by the Washington Free Beacon, wind turbines in California frequently decapitate golden eagles.