Western governors call for PTC extension that would actually work
One of the leading bipartisan political groups in America on Friday asked the leaders of Congress to extend the Production Tax Credit (PTC) to continue the benefits of wind energy in the American West.
And, the Western Governors' Association made the critically important decision to argue for the only version of a one-year PTC extension that would actually work to restart the stalled U.S wind industry.
"Given the late date in the year, it is important for Congress to make the PTC extension effective, particularly given the typical 18-month project development timeline," said the governors' letter to Congressional leaders, representing 13 Republican governors and six Democratic ones. "Taking this consideration into account would, for example, allow for all projects that start construction in 2013 to qualify for the credit."
That "start construction" language aligns with the version that passed the Senate Finance Committee last August 2. On a bipartisan vote of 19-5, committee members included a PTC extension for any projects that "commence construction" in 2013 in the tax extenders package now waiting to be attached to any bill to avert the so-called fiscal cliff.
The governors explained that, "Many Western governors have long supported the PTC as a way to help us realize clean energy goals, build our manufacturing base, create jobs, lower energy costs, and strengthen our domestic energy security…
"Extending the credit now is critical to maintain and increase U.S. manufacturing jobs, given that any continued policy uncertainty results in developers stopping turbine orders for installation beyond 2012. In turn, the uncertainty and lack of supply chain orders is already causing wind manufacturing companies to layoff American workers."
The governors noted that in the long run, they would prefer to repeal all federal energy subsidies, tax or otherwise.
"However, allowing the PTC to expire now while allowing other energy subsidies to continue within the tax code will not level the playing field and rather than avoid having the government pick winners and losers, this action would instead regressively tilt the playing field toward some established energy resources and against some important emerging resources," they wrote.
"Given this reality, we believe that until a comprehensive review of all energy subsidies is undertaken, extending the PTC for wind is the fair approach."
The PTC incentive reduces taxes on the operators of wind farms and leaves more of the money they earn from electricity sales in private hands, helping to attract $15 billion a year in private investment into new wind farms in the U.S. The benefits extend to component manufacturers, suppliers, trucking companies and more.
The PTC only rewards results, providing an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from utility-scale wind turbines. It is set to expire on Dec. 31 unless Congress extends it first. A recent study by Navigant Consulting found that extending the Production Tax Credit will allow the industry to grow to 100,000 jobs in just four years, while an expiration would kill 37,000 jobs by early next year.
A House bill seeking to extend the PTC has 119 cosponsors, including 25 Republicans, while a similar Senate bill is cosponsored by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, and the American Farm Bureau Federation. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S.
A PTC extension has been endorsed by many newspapers across the country, including the Des Moines Register, the Denver Post, the Daily Oklahoman, the Toledo Blade, the Houston Chronicle, the San Antonio Express-News, the Philadelphia Inquirer, the Chicago Sun-Times, and The New York Times.
Further endorsements of the wind energy production tax credit.