Wind Group to Congress: 'Six More Years of Subsidies, Please'

AWEA wants six more years of subsidies to build more of these | Photo: Paul Hamilton/Flickr/Creative Commons License

A leading wind energy trade association supporting an extension of a federal wind power subsidy has finally weighed in on how long it thinks that subsidy should last. In a letter sent Wednesday to Congressional leaders, the American Wind Energy Association (AWEA) has urged Congress to extend the Wind Production Tax Credit (PTC) until 2018.

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The AWEA letter was sent to Senators Max Baucus and Orrin Hatch, who lead their respective sides of the Senate Finance Committee, and Representatives Dave Camp and Sander Levin, who head the House Ways and Means Committee.

The PTC, currently set to expire at the end of the month, rewards qualifying owners of wind turbines a tax credit of 2.2 cents for every kilowatt-hour of power the turbines produce. For a 1.5-megawatt turbine -- a common size -- the credit could run as high as $30 per hour of energy production.

Predictably enough, in a year in which renewable energy incentives have been a political football, the PTC has seen its share of opposition from the right wing. That's not across-the-board opposition, however: a few Republican governors in states where wind power production is a significant part of the local economy have endorsed the idea of extending the PTC.

In the letter, the AWEA's CEO Denise Bode credits the PTC with a 12-fold increase in wind turbine production over the last five years. For some months wind industry analysts have pinned a moderate decline in industry activity on the looming expiration of the tax credit. Bode urges the Senators and Representatives to renew the PTC in during the lame duck session, projecting that 37,000 jobs may be lost in the first quarter of 2013 if the subsidy is allowed to expire:

Our top policy priority in the lame duck session is an immediate extension of the PTC, allowing projects that commence construction by the end of 2013 to qualify for the credit.

Critics of the PTC have challenged wind advocates over the PTC, asking how long the federal government is going to have to prop up the industry before it can stand on its own, the implication being that it won't. But in the letter, Bode offers a fairly specific timeline for winding down the PTC:

Analytical results indicate that a PTC beginning with 2.2 cents per kilowatt-hour, or 100 percent of the current level for projects that begin construction in 2013, followed by 90 percent, 80 percent, 70 percent, 60 percent, and then 60 percent of the current level for projects that are placed in service in years 2014 through 2018, with no PTC in 2019 or afterwards, would sustain a minimally viable industry, able to continue achieving cost reductions.

If AWEA does win an extension of the credit, it'll be yet another late-2012 face slap for the country's conservative establishment. The Koch brothers' American Energy Alliance and the Heritage Foundation have made fighting a PTC extension a priority. "Our goal is to make the PTC so toxic that it makes it impossible for John Boehner to sit at a table with Harry Reid and say, 'Yeah, I can bend on this one,'" American Energy Alliance spokesman Benjamin Cole told Politico in October.

Conservatives aren't the only people opposed to the Production Tax Credit. Mojave Desert land preservation activists breathed a sigh of relief earlier this year when Desert Air Renewables essentially walked away from a wind proposal on the east edge of Joshua Tree National Park, presumably due to the unlikelihood of receiving tax credits if the project wasn't finished in 2012. As in many other aspects of the renewable energy industry, the environmentalist community is rather deeply split. Groups whose main focus is developing renewables no matter what support the PTC, while those concerned about wind turbines' effects on wildlife, noise, and light pollution don't necessarily agree.

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