Tom Kiernan, CEO of the American Wind Energy Association (AWEA), couldn’t be more correct when noting just how strong the U.S. wind industry is. “Wind energy is an American success story: the U.S. invented utility-scale wind farms, and by investing in them here in the U.S., we now have some of the best infrastructure this country has ever built,” Kiernan wrote last week in an op-ed for The Hill’s Congress Blog.
Wind is a mature and thriving industry, which is precisely why one of the industry’s arguments that the wind Production Tax Credit (PTC) is needed to support a “nascent” industry is a total fallacy. There is simply no need for the PTC to exist any longer. I am hopeful that the Republican Congress recognizes this, and does everything they can to ensure the PTC expires permanently, including by taking up much-needed comprehensive tax reform.
Twenty years ago when I was in the Senate and the tax credit was enacted, wind was indeed an infant industry. But that is no longer the case; wind has expanded tenfold in the last 10 years alone and is more than ready to compete on a level playing field with other forms of electricity generation. Case in point – a recent New York Times article highlights how the cost of generating electricity from wind has plummeted so significantly that wind power is now cheaper than conventional generation in some regions even without the PTC, and AWEA says that costs are down 50 percent in the last five years alone.
Though unnecessary, at least Congress only extended the PTC through the end of 2014, and not longer, as part of the $41.6 billion tax extenders legislation. And despite the PTC coming in at a cost of more than 15 percent of the total package that year, the wind industry called the extension “worthless.” I doubt that the American taxpayers who are footing this bill for billions of dollars would agree. Not to mention, wind operators benefit from the PTC for a ten-year period while they generate power!
Proponents of the PTC continue to argue against all logic for its extension. In a tax system that is rife with overly generous subsidies like the PTC, what Congress should be looking at right now is comprehensive tax reform that would benefit all American taxpayers, instead of maintaining the status quo and supporting subsidies and credits like the PTC at the behest of special interests.
Nickles served in the Senate form 1981 to 2005. is the chairman and CEO of The Nickles Group, LLC.
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