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Showdown ahead over wind energy tax break  

Montana’s fledgling wind energy industry is keeping its fingers crossed that the House will approve legislation next week that would extend a tax break that has helped the industry compete financially with energy generated from fossil fuels.

The legislation would extend the renewable energy production tax credit by three years for wind, geothermal, biomass, landfill gas, trash combustion facilities and small hydropower projects.

The production tax credit, which has been around since 1992, has helped convince several companies to build commercial wind farms in Montana.
The Treasure State ranks fifth in the nation for potential wind capacity but 16th in wind generating capacity, according to the American Wind Energy Association. Montana has five commercial wind farms that produce enough electricity to power 49,509 homes.

“(The production tax credit) certainly is an important element,” said Rick Matteson, spokesman for MD Resources, which recently completed a 19.5 megawatt wind farm near Baker. “Without that tax credit, wind power is not on a level playing field with coal or other sources of generation.”

“It adds a significant amount of value to the renewable asset, which in our case is primarily wind,” said Carter Brown, vice president of renewable finance for Invenergy, which owns a 135-megawatt wind farm at Judith Gap. “I’m not sure (the tax credit) makes or breaks a project, but it certainly is an important component to the project economics.”

The House last year narrowly approved legislation extending the tax credit, which expires at the end of this year. It amounts to 2 cents per kilowatt-hour of electricity generated. Montana Rep. Dennis Rehberg voted with the majority of his fellow Republicans against the extension and plans to vote against it again.

In the Senate, Republicans were able to block the legislation by one vote. President Bush threatened to veto it because it would have been paid for by canceling tax breaks that now go to oil and gas companies.

Rehberg and the Republicans say the funding plan is a tax increase that would get passed on to consumers. Democrats say it better reflects the nation’s shifting energy priorities and that the companies can well afford it. Exxon Mobil had a $41 billion profit last year, the largest ever posted by a U.S. company.

This time around, House Democrats are proposing to repeal tax breaks given only to the largest companies – Exxon Mobil Corp., Royal Dutch Shell, Chevron, ConocoPhillips and BP – and freeze the tax write-offs for smaller companies.

Rehberg accused Democrats of playing politics with the tax credit extension.

“I’m supportive of the renewable energy tax credit, but I’ll oppose any unfair tax increases on other potential domestic energy production opportunities,” Rehberg said. “All options need to be on the table for us to end our dependence on foreign oil.”

Montana Sen. Max Baucus, a Democrat and chairman of the Senate Finance Committee, said he’s putting together his own proposal to renew the tax credit.

“One of my top priorities is working to boost domestic energy production and lessen our dependence on foreign oil,” Baucus said in a statement. “Boosting domestic energy production will also help create good paying jobs and boost our economy.”

By Faith Bremner
Tribune Washington Bureau

Great Falls Tribune

24 February 2008

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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