Just recently, we heard the excellent news that the PTC Elimination Act, a bill introduced by Reps. Kenny Marchant (R-Texas) and Mike Pompeo (R-Kan.), passed the 50 cosponsors mark. It is welcome news that opposition to the PTC continues to grow as evidenced by the tremendous amount of support that the bill has garnered in a short time. In the Senate, Sen. James Lankford (R-Okla.) has introduced a similar measure that would set a termination date for the PTC. This is all cause for applause, and further highlights the growing number of legislators that will not stand by as another extension is put on the table – especially at the expense of their constituents.
The PTC Elimination Act makes sense and here’s why: the current PTC program costs the American taxpayer. In fact, a recent Senate Finance Committee bill to extend PTC would cost $10.4 billion over 10 years.
Clearly, this is a burden that that we cannot ask families to bear. Created in 1992, the PTC was intended to be temporary. Instead, it has been renewed over and over. Meanwhile, wind power has come a long way; capacity alone has increased 5,000 percent since the PTC was created. Contrary to its small business image, the wind industry is now run by global, multi-billion dollar corporations, many of them foreign-owned with little need for support from American taxpayers.
The PTC Elimination Act would finally clarify the “beginning of construction” threshold that many wind operators have taken advantage of to qualify for significant subsidies. Today, projects may qualify if as little as five percent of their construction costs was incurred by the end of 2014 – all with no fixed deadline to put these projects in service. This opened a loophole for billion dollar corporations to begin a project with little work or investment at the end of one year and no deadline for completion. Also, the bill repeals the inflation adjustment for current recipients, which appropriately reduces their subsidy by approximately 35 percent. The PTC Elimination Act also helps streamline the tax code, which should be a common sense priority for Congress.
At the end of the day through the PTC, taxpayers are funding corporations. We cannot let Americans carry this burden any longer. It was intended to be temporary and years ago achieved its aim. Fortunately, as another year nears a close many in Congress are ready to end this 23-year-old subsidy. I applaud the work of Marchant and Pompeo, their cosponsors, and Lankford for challenging the status quo in Washington on behalf of American taxpayers everywhere. After all, reinstating the PTC is not meaningful change, cutting out this wasteful programs is.
Nickles served in the Senate from 1981 to 2005. He is the chairman and CEO of The Nickles Group, LLC, a lobbying firm that has among its clients several oil industry companies.