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Future of Wind Tax Credit In Jeopardy

posted on November 16, 2012

Despite newfound optimism over averting the Fiscal Cliff, the rare display of bipartisan cooperation late this week will be tested in the days ahead. But make no mistake, change is in the wind -- literally…

A controversial wind energy production tax credit is set to expire at the end of the year. The credit was first authorized by President George H.W. Bush two decades ago. But some House Republicans who characterize the credit as wasteful spending blocked its extension this past summer.

The last chance to extend the measure now is in the budget deal that will be cut between Obama and Republicans in the lame duck session of Congress. And this week, wind energy proponents – including a few Republicans -- explained why the $12 billion tax credit is crucial for future development.

Future of Wind Tax Credit In Jeopardy

Wind energy proponents took their case for extending Production Tax Credits to Washington, D.C. this week.

The Governors’ Wind Energy Coalition, a bi-partisan group representing 23 states cited the need for keeping thousands of workers on the job, as one major reason for Congress to renew the Wind Energy Tax Credit.

The credit, which began in 1992, is set to expire at the end of the year.

Gov. Terry Branstad, R - Iowa: “Significant private sector investment in wind energy has been, occurred, because of the support at both the federal and state policies.”

Iowa ranks second nationally in per capita production of wind energy with 20 percent of the state’s power coming through wind. Late this week, tech-giant Google, announced it will invest $75 million in an Iowa windfarm.

With seven of the nation’s ten largest wind farms, Texas leads the nation in wind installations. And the Lone Star State also is a major manufacturer in the industry.

Iowa though, has the most wind-related jobs.

Iowa Governor Terry Branstad: “We have literally thousands of wind energy related jobs in our state, and in 54 of the 99 counties directly related to wind energy. These are high-tech, high paying jobs. And I remain hopeful that congressional action will soon enable more private sector investment and productivity in the wind energy sector to occur.”  

Iowa Governor Terry Branstad, chair of the Governors’ Wind Energy Coalition, is asking for a four-year extension of the Production Tax Credit that would in turn, be phased out over that period of time.

But with the clock running out on the possible renewal, Iowa facilities have already started to shed jobs. More than 500 have been cut in the Hawkeye State alone.

Sen. Chuck Grassley: “The uncertainty about the future of this tax incentive and others “hurts the economic good these policies do, and Washington should have learned the lesson given by the expiration of the biodiesel tax credit when it was allowed to lapse two years ago. And about 23,000 jobs were put on hold during that particular time.”

Senator Chuck Grassley authored America’s first wind energy tax incentives twenty years ago. The Iowa Republican believes there is support for the tax credit in Congress.

Senator Chuck Grassley: “In addition to jobs being lost, an important source of domestic, renewable energy was hurt.  The wind-energy production tax credit is designed to level the playing field against coal-fired and nuclear electricity generation.  The credit has been tremendously successful for renewable energy development and job creation.”

The American Wind Energy Association says wind energy manufacturing, construction and operation provides 75,000 American jobs and has already generated $20 billion in private investments annually in each of the past five years.

Wind energy has become a viable new source of power. According the AWEA, 35 percent of all new power generating capacity since 2007 has come from wind.

Despite efforts reign in federal spending, Grassley pleaded for the winds of change not to blow on an industry that is still developing.

Sen. Charles Grassley: “We have a 20 year investment on this, it would be terrible to throw away that 20 year investment if we can make it a mature industry within a short period of time.“

Tags: agriculture Charles Grassley Iowa production Production Tax Credit rural development tax credit Terry Branstad wind energy wind farm


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