Federal wind energy policy
One of the federal government’s more important roles is to ensure that energy is abundant, affordable and American made to fuel the U.S. economy. Wind energy fits this bill and is a key piece of America's current and future energy needs. This is why the vast majority of voters – Republicans, Democrats, and Independents – believe that increasing the amount of energy the nation gets from wind is a good idea.
To keep wind energy growing to fulfill this shared goal, the industry’s top federal policy priorities are: stable and predictable tax credits, a national standard for renewable electricity, transmission policies to improve the nation’s power grid, and prudent siting policies.
Stable, predictable tax credits for wind energy investments
Federal tax policy has been the predominant driver of wind energy development over the last decade. In fact, tax policy has played a crucial role in stimulating private investment for all energy sectors over the years. The renewable energy Production Tax Credit (PTC) and the Investment Tax Credit (ITC) have been the keys to:
- Installing enough American wind power capacity to power the equivalent of over 15 million homes;
- Building over 550 wind energy-related manufacturing facilities across 44 states;
- Growing the wind energy workforce to 80,000 direct employees; and,
- Driving down the cost of wind by over 90%.
The PTC and ITC are not fixed laws, but rather credits with expiration dates that regularly come up for renewal. Because the wind industry never knows if these credits will be extended, investment slows to a halt during the year leading up to their expiration dates. Stable, predictable tax credits would not only facilitate wind energy investment, but also allow wind to compete on a level playing field with traditional electricity sources. That’s why predictable and stable tax treatment is the wind industry’s top federal policy priority.
PTC & ITC in 2013
Thanks to the efforts of wind energy advocates, Congress extended the PTC and ITC (which were set to expire at the end of 2012) through 2013. But the wind energy industry is fighting for longer-lasting credits.
Master Limited Partnerships (MLPs)
MLPs are a corporate ownership structure that allows for retail investors to directly purchase an ownership stake in a large energy asset. Eligibility for MLP structures is limited by law to companies deriving at least 90% of income from activities with oil, gas, petroleum, coal, timber, and certain biofuels. AWEA supports the expansion of MLP eligibility to include wind energy as a complementary policy to the PTC and ITC. AWEA has endorsed the "Master Limited Partnerships Parity Act" that is cosponsored by Senators Chris Coons (D-DE) and Jerry Moran (R-KS) and Representatives Ted Poe (R-TX-2) and Mike Thompson (D-CA-5), among others.
A strong National Renewable Electricity Standard
A Renewable Electricity Standard (RES), also known as a Renewable Portfolio Standard (RPS), sets binding targets for renewable energy in the near- and long-term to diversify the U.S. electricity generation mix, save consumers money, and reduce pollution. A Clean Energy Standard (CES) is a similar policy that expands the qualifying resource pool to include other clean energy technologies.
Today, 29 states and the District of Columbia have renewable electricity standards and eight states have renewable energy goals, but neither an RES nor a CES exist at the federal level.
Favorable transmission policies
Deploying wind energy at a larger scale than exists today requires upgrading and expanding our nation’s aging transmission grid, as well as using the existing grid more efficiently. Such improvements not only would allow deployment of more renewable energy, but also save consumers money. Consumer cost savings spring from reducing congestion, providing access to lower-cost generation plants, improving the reliability of the grid, and reducing the significant economic cost (and inconvenience) of blackouts.
Federal regulators and grid operators have made substantial progress in how transmission is planned, paid for, and operated. But more can be done. In particular, improvements in how transmission is sited are necessary to fully upgrade our grid.
Prudent siting policies
Workable siting policies at the federal, state and local level are a critical priority for the wind energy industry. AWEA and the industry are actively engaged in policy discussions related to wildlife, public acceptance (sound levels, property value analysis, shadow flicker, etc.), public lands, and radar and airspace issues, among others.
Get involved: Join the AWEA Legislative Committee
AWEA’s Legislative Committee was created by, and reports directly to, the AWEA Board of Directors. The committee focuses on energy and tax issues important to the industry that are before the federal and state legislatures and regulatory agencies. The committee seeks to grow demand for wind power through stable, long-term energy and tax policies.
Involvement in AWEA’s Legislative Committee will put you in a position to influence policies that can impact your company’s profitability and to learn about developments that can help you grow your business.
For information on how to get involved, email Amna Khan.