The Senate Finance Committee’s effort to reinstate a variety of business tax breaks is being delayed as panel members continue to grapple with the details of legislation they hope to soon consider.
Committee Chairman Ron Wyden (D-Ore.) and ranking member Orrin Hatch (R-Utah) had been planning to release the details of their “tax extenders” bill this afternoon, setting up a Wednesday markup. But that timeline changed this morning; a committee aide said the announcement would not be coming today because details of the package are still being worked out, including determining the costs of extending the various tax breaks. Committee rules require at least two days’ notice before a markup could be convened, meaning the earliest a session could come would be Thursday.The contours of the tax extenders package remain to be seen, but the emerging debate is being closely watched within energy sectors that rely heavily on federal tax benefits, such as wind electricity. The production tax credit (PTC) is the most expensive of about a dozen energy-related tax breaks among the more than 50 extenders typically lumped into a single package.Senate aides and outside lobbyists were speculating last week that the PTC could be left out of the first extenders draft Wyden and Hatch present to the committee, but it is widely expected that a PTC extension would be added to the package during committee markup. Its fate on the Senate and House floors is far less assured, and the industry is stepping up its lobbying efforts as the credit faces strong political headwinds and increasing animosity among conservative Republicans (E&E Daily, March 28).
To that end, the American Wind Energy Association today invited reporters to hear from two executives whose companies manufacture wind farm components, and the bipartisan Governors’ Wind Energy Coalition released a letter to congressional leaders urging an extension of the credit.
The common theme from both groups today was touting the number of jobs that exist in the industry and the risk those workers face because of the uncertain, boom-and-bust nature of federal tax and energy policy.
The PTC has been around since 1992, but it is rarely extended for more than a year or two at a time, and it currently is not available for new wind projects. However, any facilities where construction started – or where a nominal investment was made – before the end of last year still qualify, due to expanded eligibility that accompanied the one-year extension enacted in January 2013.
By expanding eligibility for the credit last year, Congress provided some breathing room for companies in the industry, but another extension is needed to stave off another downturn in activity, said Mark Albenze, CEO of Siemens Energy’s wind business in the Americas.
“Right now, from a manufacturing standpoint, we feel good for the next 14 to 15 months,” he said on a conference call today.
That means enough orders were placed to keep Siemens factories running in the near term, because developers hurried to place turbine orders for projects last year that remain eligible for the credit.
But AWEA CEO Tom Kiernan pointed out that no new projects are being developed in the absence of a PTC extension. “So the very early part of the pipeline has dried up again,” he said.
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