Tax Credit for Wind Energy Is Truly Up in the Air

COLO, IA - AUGUST 07: Wind mills are seen in a corn field on August 7, 2012 near Colo, Iowa. An exceptionally hot summer and the worst drought in more than a half century has caused cut prospects for the U.S. corn crop to a five-year low and has sent prices up to over $8.00 a bushel in late July trading. The price surge and limited supply has also prompted ethanol plants to voluntarily slow production by 20 percent, a two year low.
National Journal
Clare Foran
Nov. 26, 2013, 1:19 p.m.

With Cap­it­ol Hill fo­cused on big-tick­et items like the budget and the farm bill, law­makers ap­pear to have largely for­got­ten about the wind-pro­duc­tion tax cred­it, which is set to ex­pire at the end of this year.

Lead­ers of the wind-power in­dustry say they hope le­gis­lat­ors will come to­geth­er to save the cred­it, known as the PTC, from dis­ap­pear­ing, either as part of an over­haul to the tax code or a tax-ex­tenders pack­age. But op­pos­i­tion is fierce, and grow­ing stronger, with con­ser­vat­ive groups and oil and gas in­dustry stake­hold­ers lin­ing up against any ef­fort to res­cue the sub­sidy.

“This is an ex­tremely im­port­ant is­sue to the in­dustry and we’re look­ing for an ex­ten­sion of the PTC. Right now we’re in dis­cus­sions with the com­mit­tees around the lar­ger is­sue of com­pre­hens­ive tax re­form,” Tom Kiernan, CEO of the Amer­ic­an Wind En­ergy As­so­ci­ation, told Na­tion­al Journ­al Daily, re­fer­ring to ef­forts by the House Ways and Means and Sen­ate Fin­ance com­mit­tees to de­vel­op tax-re­form le­gis­la­tion.

But the com­mit­tees haven’t tipped their hand, at least not yet.

Last week, Sen­ate Fin­ance Com­mit­tee Chair­man Max Baucus, D-Mont., re­leased a series of tax-re­form pro­pos­als, in­clud­ing a plan to end or scale back cer­tain in­cent­ives fre­quently claimed by the oil in­dustry. The plan made no men­tion, however, of re­new­able en­ergy tax cred­its, in­clud­ing the wind pro­duc­tion tax cred­it.

Ac­cord­ing to a Sen­ate aide, it is un­clear how or when a le­gis­lat­ive fix for ex­pir­ing cred­its could emerge. The fo­cus right now is on a lar­ger over­haul of the tax code, the aide said, but de­pend­ing on how the de­bate pro­gresses, com­mit­tee mem­bers could con­sider deal­ing with ex­tenders for next year sep­ar­ately. At this point, however, it’s too early to tell what will hap­pen.

On the House side, Ways and Means Com­mit­tee Chair­man Dave Camp, R-Mich., is also draft­ing a pro­pos­al but has not yet put for­ward a tax-re­form plan. Aides to Camp did not im­me­di­ately re­spond to a re­quest for com­ment.

If the wind in­dustry waits for an over­haul of the tax code, however, it could be wait­ing for a long time giv­en that there is no cer­tainty that le­gis­lat­ors will be able to find enough com­mon ground ne­ces­sary to pass a com­pre­hens­ive deal in the cur­rent Con­gress.

A second op­tion, and one which may be more likely, would be for the cred­it to be re­newed as part of an ex­tenders pack­age.

Ex­tend­ing the cred­it has be­come something of a ritu­al in Con­gress, with mem­bers vot­ing to re­new the tax break for wind-en­ergy pro­du­cers sev­en times since the sub­sidy was first on the books in 1992. Un­cer­tainty over when an ex­ten­sion might oc­cur is noth­ing new either, with the most re­cent ex­ten­sion com­ing in at the el­ev­enth hour as part of a fisc­al-cliff deal ne­go­ti­ated at the end of last year.

“If com­pre­hens­ive tax re­form does not go for­ward, yes, we would be push­ing for ex­tenders which would prob­ably be in a some­what stand­ard ex­tenders pack­age some­time next year,” Kiernan said. We’ll be strongly push­ing for that as soon as pos­sible.”

Ef­forts to ex­tend the cred­it have already met with push­back from stake­hold­ers on the oth­er side of the is­sue. The Amer­ic­an En­ergy Al­li­ance, a fossil-fuel ad­vocacy group, has so far been one of the most vo­cal op­pon­ents of the cred­it and is plan­ning a ma­jor drive against the cred­it set to be­gin next week with the re­lease of a series of di­git­al and print ads in the Wash­ing­ton, D.C., mar­ket as well as na­tion­al ads rail­ing against the sub­sidy for wind pro­du­cers.

AEA is also help­ing to or­gan­ize a fly-in next week to mar­shal grass­roots or­gan­iz­a­tions from across the coun­try to put pres­sure on mem­bers of Con­gress not to re­new the sub­sidy.

Ac­cord­ing to Ben­jamin Cole, a spokes­per­son for AEA, the fly-in will fo­cus on strength­en­ing op­pos­i­tion to the cred­it among mem­bers who have already said they want to see it ex­pire.

“You’ve got Sen­at­or Joe Manchin [D-W.Va.] who has signed on to end­ing the PTC and also in West Vir­gin­ia [Demo­crat­ic Rep.] Nick Ra­hall op­pos­ing the ex­ten­sion. So we’re look­ing at some of those states where there is bi­par­tis­an con­gres­sion­al op­pos­i­tion and where the PTC presents a net loss for that state.”

When asked wheth­er he thinks the cred­it could be re­newed, like it was this year, as part of an ex­tenders pack­age, Cole said he doesn’t think so.

“The budget con­fer­ence com­mit­tee is a pri­or­ity right now and that won’t in­clude an ex­tenders pack­age, and there’s no real press­ing reas­on to con­sider a sep­ar­ate ex­tenders deal right now,” Cole said. “The only reas­on Con­gress made a mad dash last year to get tax ex­tenders done was that the Bush tax rates were go­ing to ex­pire and that would have af­fected al­most every­one in Amer­ica. This time around though we’re talk­ing about a very nar­row, in­dustry-spe­cif­ic tax sub­sidy and it’s un­likely that that will be rolled in­to any big­ger pic­ture deal.”

What We're Following See More »
MOB RULE?
Trump on Immigration: ‘I Don’t Know, You Tell Me’
8 minutes ago
THE LATEST

Perhaps Donald Trump can take a plebiscite to solve this whole messy immigration thing. At a Fox News town hall with Sean Hannity last night, Trump essentially admitted he's "stumped," turning to the audience and asking: “Can we go through a process or do you think they have to get out? Tell me, I mean, I don’t know, you tell me.”

Source:
BIG CHANGE FROM WHEN HE SELF-FINANCED
Trump Enriching His Businesses with Donor Money
1 days ago
WHY WE CARE

Donald Trump "nearly quintupled the monthly rent his presidential campaign pays for its headquarters at Trump Tower to $169,758 in July, when he was raising funds from donors, compared with March, when he was self-funding his campaign." A campaign spokesman "said the increased office space was needed to accommodate an anticipated increase in employees," but the campaign's paid staff has actually dipped by about 25 since March. The campaign has also paid his golf courses and restaurants about $260,000 since mid-May.

Source:
QUESTIONS OVER IMMIGRATION POLICY
Trump Cancels Rallies
1 days ago
THE LATEST

Donald Trump probably isn't taking seriously John Oliver's suggestion that he quit the race. But he has canceled or rescheduled rallies amid questions over his stance on immigration. Trump rescheduled a speech on the topic that he was set to give later this week. Plus, he's also nixed planned rallies in Oregon and Las Vegas this month.

Source:
‘STRATEGY AND MESSAGING’
Sean Hannity Is Also Advising Trump
2 days ago
THE LATEST

Donald Trump's Fox News brain trust keeps growing. After it was revealed that former Fox chief Roger Ailes is informally advising Trump on debate preparation, host Sean Hannity admitted over the weekend that he's also advising Trump on "strategy and messaging." He told the New York Times: “I’m not hiding the fact that I want Donald Trump to be the next president of the United States. I never claimed to be a journalist.”

Source:
THE SHAKE-UP CONTINUES
RNC’s Spicer to Work from Trump HQ
3 days ago
THE LATEST

"Donald Trump's campaign and the Republican party will coordinate more closely going forward, with the GOP's top communicator and chief strategist Sean Spicer increasingly working out of Trump campaign headquarters, the campaign confirmed Sunday."

Source:
×