Wind Production Tax Credit: Going, Going, Gone?

The wind power industry and its supporters fought hard to get an extension of the production tax credit (PTC) today as talks on a payroll tax cut extension package entered crunch time on Capitol Hill, but their prospects appeared uncertain at best.

The American Wind Energy Association (AWEA) was leading the PTC push, promoting a letter from Oklahoma’s Republican governor, Mary Fallin, in support of the subsidy, as well as a letter from several corporate purchasers of renewable energy—including Staples, Starbucks, Nike, Levi Strauss & Co. and Yahoo—backing an extension. And in a Renewable Energy World piece, the AWEA noted that “a bipartisan group of Colorado’s congressional delegation, including Republican Representatives Scott Tipton and Cory Gardner, called on a congressional conference committee to extend the wind energy production tax credit (PTC) as part of the payroll tax extension.”

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But all of that appeared to be to little avail. Platts quoted House Energy and Commerce Committee Chairman Fred Upton (R-Mich) saying flatly that the extension wouldn’t make it into a legislative package that could be finalized as early as tonight. Upton told Platts the PTC and other energy tax credit extensions “never were going to be in it,” and a key Democrat on the committee, Henry Waxman of California, concurred.

In addition, The Hill quoted Tennessee Republican Sen. Lamar Alexander saying he could not “think of anything that would derail more rapidly the consensus that is developing about extending the payroll tax cut” than to try to include the PTC in the package. The Hill also reported that Senate Democratic aides said that extension of expiring renewable electricity tax credits were “unlikely to make it into the final payroll deal.”

Under current law, companies that generate wind, geothermal, marine and certain types of biomass power are eligible for a tax credit worth 2.2-cents per kilowatt-hour for the first 10 years of a plant’s operation. The provision covering wind is due to expire at the end of 2012, and runs for an additional year for the other forms of renewable energy.

The credit has been particularly important for wind power producers, who say that it has helped spur more than $16 billion in annual private investment and supported tens of thousands of manufacturing jobs over the last several years. A recent report commissioned by the AWEA and put together by Navigant Consulting found that the U.S. wind industry would lose 37,000 jobs and suffer a nearly two-thirds drop in private investment if Congress allows the PTC for wind to expire.

The AWEA did a full-court press to get the PTC extension done now because of the amount of lead time it takes to manufacture turbines and other wind quipment and to develop projects. It says companies making plans for beyond 2012 are already hesitating on projects and that with each passing month investment in the industry is falling by the wayside.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.

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