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Battle grows over extending tax breaks for wind energy producers

Federal lawmakers warn that states stand to lose wind industry jobs if Congress fails to pass legislation to extend the federal tax break for wind energy producers, known as the production tax credit, which is due to expire at the end of this year.

“We’re just not doing our job,’ Sen. Michael Bennet, D-Colo., said. “We need to get after it.”

Bennet and fellow Colorado Democratic Sen. Mark Udall are both concerned that their state alone could lose 6,000 jobs. And according to the American Wind Energy Association, as many as 37,000 manufacturing jobs could be at risk nationwide.

The producer credit helps offset the cost of electricity production during a wind farm’s first 10 years. It came about in 1992 when the industry was still finding its legs. It’s also something that must be renewed periodically by Congress.

Proponents say if lawmakers wait until the end of 2012 to get this done, the industry risks losing out on potential wind development projects. The thinking being that if a company is considering a new contract, it may hold back. If that happens, then it sets off a domino effect where wind turbine manufacturers and others in the supply chain lose work.

Bennet has co-sponsored a bill in the Senate that would give the credit a two-year extension. The House version calls for four years. Both are moving slowly. In an effort to get it done sooner rather than later, Bennet also has put forward an amendment with a plan to pay for the program, with the help of some Republicans.

“I think that in the overall scheme of things in Washington where the place… (has) really become, I call it ‘the land of flickering lights’, because the standard of the success there is where we kept the lights on for another two months, and kept the government running for another two months.”

Not everyone thinks wind is worth the effort, or the estimated $2 billion to $4 billion it could cost next year.

Rep. Doug Lamborn, R-Colo., opposes the the production tax credit. He says he doesn’t want taxpayers to be forced to fork over money to prop up the industry.

“At some point wind needs to stand on its own two feet,” Lamborn said. “And when it comes to receiving taxpayer subsidies … it doesn’t seem to get to the point where it can stand on its own.” He adds that his hope is this alternate energy source finds its way to give consumers more options.

Over the last 20 years, the wind industry has grown to provide on average about 3 percent of power grid electricity nationwide. In some states, it makes up almost a quarter.

“Washington does not do a good job of picking winners and losers. In fact, it usually picks losers,” Lamborn said.

In response, Bennet’s office says, “Many opponents of the wind tax support federal subsidies for other energy industries, including some for the largest oil companies.”

The production tax credit helps developers of wind farms, which power the businesses of companies like Vestasm a wind turbine manufacturer with production and research located in Colorado. The company has indicated layoffs could be become a reality without the extension.

Tony Knopp, the general manager for Vestas Towers, recently made a rare media appearance and explained the value of America’s investment in this renewable.

“We don’t use water in our process, we don’t have to worry about anything to do with water, and water shortages,” he said. That was an apparent reference to hydraulic fracturing, which is used in to extract oil and gas from the ground.

Bennet says this is still an emerging industry and provides jobs manufacturing jobs his and other states can’t afford to lose.