House Republicans hailing from the windiest of districts are coming out on different sides of the fight over the production tax credit, which the wind-power industry considers key to its growth — and which will expire at year’s end unless Congress votes to renew it.
“I have supported it in the past, and there are efforts being worked on now to try to maybe change, ramp it down,” said Rep. Cory Gardner, R-Colo., whose district is the sixth-windiest in the country, according to data compiled by the American Wind Energy Association. After a pause, Gardner added: “But, I would support it, yes.”
Of the top 10 windiest congressional districts in the country, nine are represented by Republicans, according to AWEA’s 2012 annual report.
House Agriculture Chairman Frank Lucas, R-Okla., whose district ranks fifth on the list, said in a statement to National Journal Daily that he, too, supports an extension of the PTC. “While it is not completely clear in what form it would be extended, I believe it is important that we continue investing in this resource to help increase the production of all forms of American made energy,” Lucas said.
Every year around this time, the pressure builds in Congress to pass a host of temporary tax policies — often called extenders — including the wind-energy tax credit, which has been on the books for 22 years with just a couple of short lapses. After expiring for two days in early January, Congress voted to extend the PTC for one year.
With another expiration date looming, wind-energy lobbyists privately say Congress is unlikely to extend the policy by year’s end. This is for a couple reasons: 1) The most obvious legislative vehicle for the tax-extenders package — the budget — does not include them; and 2) Republican leadership in the House is reluctant to act on any individual tax policies before House Ways and Means Chairman Dave Camp, R-Mich., and his counterpart in the Senate, Finance Chairman Max Baucus, D-Mont., make progress on comprehensive tax reform, which they’ve both pledged to pursue.
This effort is the key reason why House Majority Whip Kevin McCarthy, R-Calif., whose district is the fourth-windiest in the country, is not coming out in support of an extension this year.
“The Whip is supportive of the current efforts by Chairman Camp and the Ways and Means Committee to reform our tax code,” a spokesman for McCarthy said in an email to National Journal Daily. That’s a change in tone from last year. “I think we should do it,” McCarthy said when asked at a National Journal event whether he supports extending it.
Texas, the biggest wind-producing state, includes three of the windiest districts, all represented by Republicans who support, to varying degrees, phasing out the tax credit.
“The wind industry has been a great success in Texas, and according to its own reports, it will soon be cost-competitive with cheaper forms of electricity,” Rep. Randy Neugebauer, R-Texas, who represents the windiest district in the country, said in a statement. “Because of this success, I believe it’s time for a gradual phase-out of the Production Tax Credit.”
Rep. Mac Thornberry, R-Texas, whose district is the eighth-windiest, has shifted his position over the past couple of years. In 2011, he introduced a bill to extend the policy for 10 years, but a similar proposal he introduced in May called for a phase-out.
Rep. Adam Kinzinger, R-Ill., whose district rounds out the top 10, also opposes extending the policy. “I have long supported an ‘all-of-the-above’ approach to America’s energy needs, but I believe it is time for wind energy to learn to survive without the support of the production tax credit,” Kinzinger said in a statement.
Kinzinger’s district also includes a heavy presence from Exelon, the nation’s largest generator of nuclear power, which has been lobbying to end the wind tax credit over the past year or more.
The House’s biggest opponent of the wind tax credit — and most other temporary energy tax incentives — sees support growing for his cause. “I have noticed a difference,” said Rep. Mike Pompeo, R-Kan. “Even those folks who have been on the other side aren’t as vocal. I think there is an increasing recognition that this kind of narrow carve-out doesn’t make sense.”
When asked about his colleagues who support extending the PTC, Pompeo responded: “We just have a disagreement.”
Having a lot of wind in your district shouldn’t be the only reason to support a tax incentive, Pompeo said. “We have a tremendous amount of wind energy in Kansas,” he said. (The state is fifth in the country for wind generation, according to AWEA.) “One could make the case that for that reason alone I should support it,” Pompeo said. “But it doesn’t make sense for Kansas consumers.”
To what extent, if at all, Congress tackles comprehensive tax reform next year will affect whether lawmakers vote to retroactively extend the wind tax credit sometime next year. Lobbyists say that the expiration of the PTC would start having a measurable negative impact by April.
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