WASHINGTON – Wind energy supporters are hoping to blow past opponents in the Senate, as the chamber considers broad legislation to renew dozens of expired tax breaks – including one credited with making turbines spin in Texas.
Although the Senate began debating the broad “tax extenders” measure Wednesday, its path out of the chamber is far from clear, complicated by some Republicans’ hopes to make changes, such as doing away with an existing medical device tax or dropping the renewable energy production credit altogether.
But the legislation’s supporters are hoping that the broad array of interests represented in the bill – from teachers to race track owners – will help it get past critics with objections to individual provisions.
That strategy could be a big boost for the wind industry, which has been lobbying for reinstatement of the renewable energy production tax credit that expired at the end of last year.
It lets renewable power project owners reduce their tax bills by 2.3 cents for every kilowatt-hour of electricity they produce over a 10-year period. Despite sputtering in and out of existence over the past two decades – and expiring at least eight times – it is credited with financing wind farms across the United States and making Texas a national leader in new wind power construction last year.
The provision in the Senate tax extenders bill would give the industry until the end of 2015 to start construction on projects and make them credit-eligible, at an estimated price tag of $13 billion over the next 10 years.
Although the production tax credit has some high-profile champions in the Senate, it has plenty of critics, too, including Sen. Jeff Flake, R-Ariz., who on Tuesday dubbed the provision a “zombie subsidy” that keeps coming back to life.
“The ‘Walking Dead’ wind production tax credit, which is little more than a taxpayer-funded entitlement program, lives on,” Flake said on the Senate floor. “Why are we pumping money into a technology that even (the Energy Department) indicates should be able to stand on its own?”
Finance Committee Chairman Ron Wyden, D-Ore., said “the stop-and-go nature” of the production tax credit has hampered the growth of wind power. “It’s critical in my view to provide certainty to these businesses,” Wyden said, noting that “electricity generating stations and refineries are major investments that can take years to plan and to finance and construct.”
“Our country needs a long-term, stable energy policy,” he said.
Although production tax credit supporters are focusing on the Senate action now, even harder challenges await them in the House of Representatives, which is considering some of the tax extenders individually.
That approach means that individual tax credits and deductions will have to stand on their own merits to be renewed – rather than benefiting from inclusion in a broader legislative package with popular provisions.
House Ways and Means Committee Chairman Dave Camp, R-Mich., also has not committed to advancing the renewable energy production tax credit.
One possible compromise between the tax credit’s fierce critics in the House and supporters in the Senate may be to commit to ending the credit once and for all. Such a deal could involve a short-term renewal of the production tax credit, along with a commitment to cancel it entirely some time afterward. But supporters would have to overcome wariness by critics who say even a planned sunset date codified in law could be revoked later on.
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