A senator from the windswept state of Oklahoma wants to remove a tax credit for wind energy from the tax code.
Republican Sen. James Lankford introduced a bill Wednesday, titled the PTC Elimination Act, that would remove the Production Tax Credit from the tax code entirely. The credit expired at the end of 2014, but a renewal is attached to a tax extenders package making its way through Congress.
Lankford, echoing oil industry groups who spoke against the credit last month, said wind energy has become self-sustaining and no longer needs to be subsidized federally.
“I am a fan of an all-of-the-above energy strategy, and I certainly support wind as a large part of that goal,” he said.
“There is no need for the taxpayer to continue to subsidize a wind start-up tax credit.”
In addition to wind, the Production Tax Credit is tied to 11 other sources of renewable energy.
For wind, the tax credit is 2.3 cents per kilowatt-hour for the first 10 years of a facility’s existence. Lankford estimates the tax credit would cost taxpayers $10.5 billion during the next 10 years.
The federal government subsidizes oil companies to the tune of billions of dollars every year.
Right now, projects that began before Jan. 1 still qualify for the tax credit. Under Lankford’s bill, the last day any company could receive funds from the credit would be Dec. 31, 2026.
Lankford has campaigned in the past on relying more on fossil fuels, such as natural gas, instead of renewable sources.
Observers say it’s unlikely the bill will make much progress.
Oklahoma is a major player in wind energy. In 2014, the state was ranked fourth for installed wind capacity, according to the American Wind Energy Association.
There are 2,614 wind turbines in Oklahoma that produced about 17 percent of all electricity produced there in 2014, according to the association. Wind power supports 5,000 jobs in that state.
Lankford contends the tax credit has outlived its usefulness and is a redundancy since 37 states already provide incentives for wind energy production. He said wind generation has grown 5,000 percent since the tax credit was instituted in 1992.
Some business groups disagree.
On Monday, 580 companies working in clean energy from around the country signed a letter urging Congress to extend the credit. Meanwhile, 2,000 businessmen and women signed a letter that also called on Congress to extend the tax credit, according to the wind trade group.
The Senate Finance Committee passed the extension of the credit 23-3. That included yes votes from senators on both sides of the aisle.
Rob Gramlich, senior vice president of government and public affairs at the American Wind Energy Association, said he’s hopeful that, contrary to Lankford’s bill, the wind tax credit will be renewed by the end of 2015.
“Hundreds of American businesses employing American workers have also made it clear extending these incentives is critical to plan their business and keep their doors open,” he said. “We will continue to educate all members of Congress about all of wind energy’s benefits to our economy.”
|Wind Watch relies entirely
on User Funding