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Wind energy tax credit discarded

It’s a tax credit that supposedly has no enemies, but that wasn’t true as a House and Senate conference committee finished work on a hard-fought tax bill Tuesday night – only to leave out the much-sought-after production tax credit for the wind power industry.

That startling outcome left the Colorado congressional delegation scrambling for a new strategy – along with a new legislative vehicle to carry the wind power credit on behalf of Vestas American Wind Technology, which has four wind turbine plants in Colorado.

Vestas officials have repeatedly warned the Colorado delegation that without the $3.5 billion a year tax credit, the manufacturer will probably have to lay off hundreds of workers because of an expected slump in the sale of turbines. That warning was drafted into a delegation letter that was sent to the House and Senate conferees last month.

That warning apparently fell on deaf ears as House Republicans fought with Senate Democrats on the committee over ways to cut federal spending while extending the 2 percent payroll tax deduction, unemployment insurance and preventing a mandated cut in Medicare reimbursement rates for doctors. When the committee announced its compromise Tuesday night, a list of $20 billion in business tax credits – including the wind power credit – had been left out of the final bill.

“Unfortunately, the bill was done behind closed doors so we had no idea where the committee stood on the wind power credit until they were finished,” one Colorado congressional staffer said Wednesday afternoon.

A Senate staffer said that in the highly partisan push-and-shove over the payroll tax deduction and cutting federal spending to pay for that, the conference committee ultimately pushed the list of sought-after business credits out of the discussion.

“Bills like this can quickly become Christmas trees with other measures attached in committee and it looks like the conferees ultimately tried to stick to the major issues – the payroll deduction, unemployment insurance and Medicare,” the staffer said on background. “Apparently the debate was over how to pay for all the revenue deductions being sought.”

The wind power credit provides a 2.2 percent tax credit for the purchasers of wind turbines. Vestas officials have been seeking a multiyear extension of the tax credit as a way to ensure future sales, but Congress has been authorizing the credit year to year. It is estimated to cost the treasury about $3.5 billion a year.

Reacting to the setback, Democratic Sen. Michael Bennet drafted a wind power amendment Wednesday he wants the Senate to agree to attach to atransportation bill that is currently pending in the House. The Senate could take up the bill as early as next week.

Meanwhile, Sen. Mark Udall, also a Democrat, had drafted a letter to both Democratic and Republican leaders in the Senate, urging them to support a vote on the wind power amendment when the transportation bill arrives.

When he met with Pueblo manufacturers, including Vestas officials in January, Udall predicted that Congress would quickly approve the tax credit because it had bipartisan support.

Apparently not in the conference committee.

The problem for the Colorado delegation is that few bills are expected to get through Congress in this highly partisan election year, so there will be few opportunities to get the wind power credit attached to anything.

There is always the option of trying to pass the measure as a stand alone, separate bill, but that is unlikely.

So, the focus now shifts to the pending transportation bill.

“Colorado stands to suffer a huge economic blow if Congress can’t get its act together and extend this critical tax credit,” Bennet said in a statement supporting his amendment.

Rep. Scott Tipton, the freshman Republican who represents Pueblo and the 3rd Congressional District, was surprised and disappointed by the conference committee’s decision, according to staff.

“Representative Tipton will continue to work to support industries and jobs in the 3rd District,” a spokesman said.

Last week, as news reports hinted that the conference committee was deadlocking on the major issues, Colorado lawmakers and Vestas lobbyists were asked if they had a fallback strategy in case the conference committee stalled or ignored the wind power credit.

That question was brushed aside at the time as they said their focus was on the conference committee.