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GOP senators say wind tax credit is safe in their tax overhaul
Credit: By Ari Natter | Bloomberg | November 7, 2017 | www.bloomberg.com ~~
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Republican members of the Senate Finance Committee said they oppose a move by their colleagues in the House of Representatives to scale back the wind production tax credit.
“We think that issue has been dealt with,” South Dakota Senator John Thune, the Senate’s No. 3 ranking Republican, said in an interview. “There may be folks who would like to follow the House approach, but I don’t think that’s what we are going to able to do over here.”
With this comment, three GOP senators – each of them on the tax-writing committee – have now said they oppose changes to the wind tax credit. Republicans hold a 52-48 advantage in the upper house. Democrats are largely opposed to the tax overhaul bill, and so the bill writers need the support of nearly every Republican in the Senate in order for the measure to pass.
The subsidy, which provides a $23 per-megawatt-hour credit, is already scheduled to phase down and expire in 2020. It was extended in 2015 as part of a broader congressional compromise that also ended the ban on most crude-oil exports.
But, in a surprise move, the House tax bill released last week cut the credit by more than a third, and made it harder for projects still under construction to get the credit. Those changes reduced value of the credit by as much as 45 percent, according to an analysis by Clearview Energy Partners LLC.
“We regard the PTC proposal as possible negotiating collateral for a potentially contentious House-Senate reconciliation of very different tax reform bills, and we do not expect it to survive in its current form,” the Washington-based consulting firm said in a research note.
If the House tax plan were to become law the amount of new wind power forecast to be installed in the U.S. would drop by half from 38 gigawatts through 2020 to 19 gigawatts, according to Bloomberg New Energy Finance.
“The wind energy production tax credit is already being phased out under a compromise brokered in 2015,” Senator Chuck Grassley, an Iowa Republican, said in a statement last week. “It shouldn’t be re-opened. I’m working within the Senate Finance Committee to see that the commitment made to a multiyear phase-out remains intact.”
Senate tax writers, who plan to release their version of a massive rewrite of the tax code as soon as Thursday, are still negotiating the details of the bill, Senator Dean Heller, a Nevada Republican, said in an interview.
“I’m hoping for a favorable result at the end of the day,” Heller said. “I’m in support of the tax credit.”
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