Exelon Corp. is calling for an end to production tax credits for wind power that will expire this year unless Congress acts to renew them.
Christopher Crane, president and CEO of the Chicago-based utility, said during an earnings call Wednesday that the tax incentives have already been in place for two decades and should be halted.
“We do have a very strong view on [production tax credits]; publicly we’re asking them to be stopped,” he said. “[The tax credits have] been in place since 1992, I believe, and I think that’s enough time to jump-start an industry, 20 years.”
Exelon is opposing the tax incentives despite owning a large amount of wind production, since it is generating low-cost electricity from a large fleet of nuclear reactors.
Most of the electricity Exelon produces – about 93 percent – is generated at the company’s 10 nuclear plants in Illinois, Pennsylvania and New Jersey.
The utility also owns and operates 38 wind projects in the Midwest and on the West Coast – about 900 megawatts – and Crane said some of those projects will still move forward if the tax credits are not extended.
But Crane added that phasing out the tax credits will also cut into development of wind generation, and Exelon may focus more on building solar projects. “I would say that the wind growth would be significantly reduced with the PTC going away,” he said. “There probably will be some solar opportunities left, and we’ll continue to focus on those.”
Crane’s comments arrived on the heels of a Senate panel’s approval of an extension of the expiring provisions yesterday (E&ENews PM, Aug. 2). The Senate Finance Committee approved a package that includes the 2.2-cent-per-kilowatt-hour production tax credit for wind.
Crane also warned that subsidizing wind alone could cause market distortions.
“I think there are unintended consequences with all the fundamental shifts in the generation stack right now between coal retirements, natural gas coming down,” he said. “Trying to subsidize a single source can create some market distortions, and we’re asking for a break period; let’s let the market stabilize.”
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