Executives of seven wind energy companies pressed Gov. Sam Brownback to lobby the state’s congressional delegation in opposition to a cut in a federal tax credit that could derail $1.5 billion in planned projects across Kansas.
A provision weakening the production tax credit was folded into the U.S. House bill endorsed by all four Kansas representatives in Washington, but wind industry executives asked Brownback and Lt. Gov. Jeff Colyer to encourage fellow Republican U.S. Sens. Pat Roberts and Jerry Moran to keep changes in the tax credit out of the Senate’s bill and the final compromise tax legislation.
Tom Kiernan, chief executive officer of the American Wind Energy Association, led the delegation of wind power executives into a meeting at the Capitol in Topeka ahead of Brownback’s trip Wednesday to Washington, D.C. The governor flew to Washington to dig into the delay in his confirmation vote for a post in the administration of President Donald Trump.
“We’re appreciative of the governor reaching out to senators,” Kiernan said. “The House bill threatens nationally about $50 billion to $60 billion worth of investment. In Kansas, it’s about $1.5 billion worth of investment that’s in the pipeline.”
He said the tax credit is scheduled to be phased out in 2020 based on an agreement approved by Congress in 2015. The Senate’s version of tax reform would uphold that deal. The House voted to shred that bipartisan agreement by retroactively reducing the credit by about one-third and by altering other tax-credit rules in a way that could halt about half of the wind farm projects on the table in the United States.
Mark Goodwin, president and chief executive officer of APEX Clean Energy in Charlottesville, Va., was among executives who huddled with Brownback and Colyer. He said the U.S. House bill would abandon a pro-business, orderly reduction in the tax credit that had been factored into financial assessments by Kansas wind farm developers.
“Kansas is in the current environment one of the most desirable places to invest in new development-stage projects. The House bill makes cuts off the wind industry at the heels,” Goodwin said.
The state has the third-highest wind production per capita and ranks fifth nationally for installed wind capacity. The industry in Kansas employs approximately 6,000 people. Thirty percent of all electricity produced in Kansas comes from wind farms. These units generate enough electricity to power 1.3 million homes.
Under existing federal law, the production tax credit for wind, geothermal and biofuel facilities that started construction in 2015 and 2016 receive a 2.3-cent per kilowatt hour tax incentive for 10 years. The 2015 deal took the credit down to 80 percent in 2017, 60 percent in 2018 and 40 percent in 2019.
The House bill that passed with support from Kansas U.S. Reps. Lynn Jenkins, Kevin Yoder, Bob Marshall and Ron Estes would drop the tax credit to 1.5-cent per kilowatt hour retroactively and alter a definition in the guidelines of “under construction.”
Matt Riley, chief executive officer of Infinity Wind Power in Santa Barbara, Calif., said the approach outlined in the House bill could have an impact on the second phase of the Solomon Forks development in northwest Kansas near Colby.
“The second phase is 198 megawatts. That would be roughly $250 million to $300 million,” he said.
In the past, Brownback supported the federal production tax credit for wind farms and endorsed the five-year phase out of the tax break. The governor proposed last year that 50 percent of Kansas electricity be derived from wind by 2019.
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