October 4, 2013
U.S.

Wind industry could lose its tax credits

By Tracie Mauriello / Post-Gazette Washington Bureau | October 3, 2013 | www.post-gazette.com

WASHINGTON – Tax credits helped wind farms sprout up in Pennsylvania and across the country, but House Republicans are wondering whether the breaks are still helpful now that the industry has gained a foothold in the energy sector.

Congress has until the end of the year to decide. The current tax credits expire then.

The credits reduce wind-energy producers’ tax liability by 2.3 cents per kilowatt hour. A one-year extension would reduce revenue about $6.2 billion over 10 years, according to the Joint Committee on Taxation.

Republicans say wind production tax credits which began in 1992 were supposed to be temporary and were aimed at helping the new industry get off the ground.

“We keep hearing [from the wind industry] that ‘We’re almost there,’ or ‘Just a little bit longer,’ but the facts state that wind power has been steadily increasing,” said Rep. James Lankford, R-Okla. “When does wind power take off on its own?”

He offered data showing that wind farms are producing 13 times more power than a decade ago.

Mr. Lankford’s comments came Wednesday during a hearing of the Oversight and Government Reform subcommittee on energy policy, which he chairs.

The subcommittee’s ranking Democrat, Jackie Speier of California, said other segments of the industry, including oil and gas, have been getting bigger tax credits for decades.

“We shouldn’t look into any one of these credits in isolation. If we’re going to look at these credits we need to look at them in total … to make sure we are not picking winners and losers,” she said. “We have got to be fair.”

Proponents of wind production tax credits say uncertainty over renewal is drying up investment in the renewable energy source. They suggest that wind power is producing low-cost energy and that opponents want to put wind farms out of business to reduce competition for other segments of the industry.

“It seems that the [detractors] of the wind industry are asking the government to pick winners and losers by only removing federal subsidies from one particular sector,” said Rep. Steven Horsford, D-Nev. “I would not support that approach.”

Congress is unlikely to vote on wind tax credits as a standalone bill but could take them up as part of an omnibus tax bill.