What will happen in the House was anyone’s guess as of midday on Tuesday, but the tax bill passed by the U.S. Senate early in the morning includes a one-year extension of the production tax credit for wind power, which had expired at midnight.
Significantly, the bill as passed by the Senate [PDF] also makes eligible facilities that are under construction before Jan. 1, 2014, whereas the just-expired version of the law had required turbines to be operating by the deadline. That change could allow developers to squeeze many more qualifying projects into the pipeline, even if Congress doesn’t go along with the longer-term extension that the industry is seeking.
The controversial tax break provides a credit of 2.2 cents per kilowatt-hour of electricity produced for the first 10 years of a wind power plant’s operation.
The months leading up to the PTC expiration saw a rush to get new projects up and running – and turned the PTC into a political issue in the 2012 campaign, one that seemed to be particularly potent in states such as Iowa and Colorado, where wind power had translated to job growth. Thousands of jobs were also shed along the wind power supply chain as 2013 projects were put on the shelf.
The Joint Committee on Taxation has estimated that modifying the expiration date to make turbines under construction by the end of 2013 eligible would cost the federal government $116 million in 2013 and a cumulative $12.1 billion by the end of 2022.