The wind-power lobby is spinning the facts in a $1.4-million TV ad campaign aimed at extending a lucrative tax break worth billions to the industry.
- Its ads claim that Congress is “threatening new taxes” targeting wind power, which isn’t true. No “new taxes” are envisioned. Instead, Congress is considering whether or not to renew an existing $1.3-billion-a-year tax break that expires at the end of 2012.
- The industry is also claiming that wind energy is “on track” to support half a million new jobs within 20 years. Maybe so. But those jobs “would displace jobs and economic activity elsewhere,” according to the very study cited by the wind lobby.
The debate over the tax break couldn’t be coming at a worse time for the wind-power industry. Falling natural gas prices are already bringing stiff competition from gas-fired electric plants, making some wind-power projects economically uncompetitive even with the advantage of a tax subsidy.
And although there is some bipartisan support for extending the tax break for wind power, several Republican lawmakers, including Rep. Paul Ryan, are pushing to repeal all existing tax breaks for “renewable” energy sources — including the credit for wind power.
Meanwhile, the Obama administration’s scandal-plagued loan guarantee to Solyndra Corp. has made federal support for renewable energy projects in general a political target for Republicans. Already the Republican-leaning Crossroads GPS group is running ads calling the president’s green-energy program a “disgrace” and calling on Congress to “shut it down.”
But the Crossroads ads also strain the facts. For example, they cite an inflated figure for the Obama administration’s loan guarantees and grants to “clean energy” firms owned by Obama campaign backers. The figure came from a conservative author, but Crossroads misleadingly attributes it to a respected news magazine.
The American Wind Energy Association’s ad, titled “Weld by Weld,” has been running in 11 states at an estimated cost of $1.4 million so far, according to Kantar Media’s Campaign Media Analysis Group. Variations of the ad target specific Republican House members with the anti-tax, pro-jobs message.
No ‘New Taxes‘
Despite the claim of the AWEA, Congress is not “threatening new taxes” against wind energy. Congress is considering H.R. 3307, which would extend tax credits for energy production from a variety of renewable energy sources, but most immediately for wind power.
This tax credit, first enacted in 1992, offers a tax rebate of 2.2 cents for each kilowatt-hour of energy produced for the first 10 years of electricity production from utility-scale turbines powered by renewable sources. Wind farms put into service after the end of 2012 won’t qualify for the credit under existing law. H.R. 3307 would extend that deadline by four years.
The tax credit is a multibillion-dollar prize for the industry. The nonpartisan Joint Committee on Taxation projects that it will reduce federal revenue by $1.3 billion in the current fiscal year, $1.4 billion in fiscal 2013 and $1.5 billion the following year.
Losing this benefit for future wind farms almost certainly would hurt the industry’s business. According to the Union of Concerned Scientists — which backs federal support for renewable energy — the credit has been allowed to expire for a while on three occasions in the past, followed in each case by a sharp drop in installation of new generating capacity. “This ‘on-again/off-again’ status contributes to a boom-bust cycle of development that plagues the wind industry,” the UCS states.
This time the industry faces stiff opposition from many free-market conservatives. A bill by Republican Rep. Mike Pompeo of Kansas would repeal all such energy tax credits — including the one for wind power. That bill now carries the names of 18 additional cosponsors, all Republicans, including Budget Committee Chairman Paul Ryan of Wisconsin. The repeal also has the support of the anti-tax Americans for Tax Reform and several other conservative groups.
Support for extending the credits is bipartisan, but leans heavily Democratic. The legislation is sponsored by Republican Rep. Dave Reichert of Washington state, but only 15 of the 64 additional cosponsors are Republican. So the wind lobby is scrambling to pick up additional GOP support with its “new taxes” pitch.
The most recent variation of the wind lobby’s ad targets freshman GOP Rep. Tim Griffin of Arkansas, for example. The 15-second spot started running in Little Rock on Feb. 6, asking “Where does Congressman Tim Griffin stand?” An on-screen graphic asks, “Is he protecting American wind jobs?”
Similar 15-second versions began running earlier in the districts of freshmen GOP Reps. Lou Barletta of Pennsylvania and Bobby Schilling of Illinois (a Tea Party favorite). In all, according to CMAG, the main 30-second ad or shorter versions have run in 11 states — Arkansas, California, Colorado, Iowa, Illinois, Nebraska, Nevada, Ohio, Pennsylvania, South Dakota and West Virginia.
But however much the wind lobby feels the need to line up Republican support in the House, in our judgment it does not justify the deceptive tactic of passing off an expiring tax break as “new taxes.”