Congress extended wind energy tax credits worth billions of dollars in the last-minute deal hammered out by Congress to avoid the fiscal cliff, a move decried by free market organizations as corporate welfare.
The wind energy production tax credit (PTC) will be extended until the end of 2013 and dole out an estimated $12.1 billion in tax credits to the wind energy industry over the next decade.
Congress first enacted the wind energy PTC in 1992 and has renewed it seven times since but the tax credit faced an uncertain fate amid the back-and-forth fiscal cliff negotiations. It officially expired for one day before being revived.
"Big Wind won a midnight reprieve and another year of the production tax credit, but in the process the industry was forced to admit it could live without taxpayer subsidies,” American Energy Alliance president Thomas Pyle said in a statement to the Free Beacon. “That is no small victory for free market advocates who have opposed this and other wasteful government handouts.”
The wind industry has said it plans to phase out the tax credit gradually after five more years but it has no intention of giving up its subsidy at this time.
“On behalf of all the people working in wind energy manufacturing facilities, their families, and all the communities that benefit, we thank President Obama and all the members of the House and Senate who had the foresight to extend this successful policy, so wind projects can continue to be developed in 2013 and 2014," said Denise Bode, the outgoing CEO of the American Wind Energy Association.
The language of the production tax credit was 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. The looming threat of an expired tax credit sent wind companies rushing to complete wind turbine projects and cash in on the incentive.
Christine Harbin, a federal policy analyst for Americans For Prosperity, called the renewal "another example of how the wind energy industry has a lot of lobbying power close to negotiators in the 11th hour.”
“Corporate welfare was able to sneak in there while congress was scrambling around for a deal,” she said.
Conservative think tanks, interest groups aligned with the oil and gas industry, and Republican legislators launched a campaign earlier this year to kill the wind PTC. Forty-seven House Republicans urged House Speaker John Boehner (R., Ohio) to allow the subsidies to expire in September.
“We believe that the Solyndra scandal has demonstrated that it is time for the federal government to stop picking winners and losers in the energy marketplace,” the letter said. “Twenty years of subsidizing wind is more than enough.”
The American Energy Alliance held a press conference in December with 10 other free-market organizations as well as Rep. Steve Scalise (R., La.) and Sen. Lamar Alexander (R., Tenn.) to oppose extending the credit.
"It's the energy equivalent of going to war with sailboats when we have nuclear subs available,” Alexander said at the press conference.
The wind industry hired a team of heavyweight lobbyists with cozy connections to Capitol Hill and the Obama administration to ensure the survival of the tax credit, the Washington Examiner’s Timothy P. Carney reported.
K Street firm McBee Strategic Consulting lobbied for the wind PTC on behalf of both General Electric and Google.
MidAmerican Energy, a subsidiary of ultra-wealthy investor and Obama adviser Warren Buffet’s Berkshire Hathaway, also lobbied on the PTC.
Opponents of the wind credit are regrouping for the next fight when the wind PTC again faces renewal at the end of the year.
“I don't think the wind lobby or the wind PTC is going away any time soon,” Harbin said. “Our tactics will probably change. I was a little disappointed that our coalition letter didn't affect the conversation as much as we would have liked.”
As previously reported by the Free Beacon, wind turbines in California frequently decapitate golden eagles.