Senate Committee Moves to Extend PTC and ITC

Finance Committee’s 23-3 vote signifies bipartisan support of tax incentives

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The American wind energy industry in July praised members of the U.S. Senate Finance Committee for voting overwhelmingly to extend over 50 tax policies through 2016, including the renewable energy Production Tax Credit (PTC) and Investment Tax Credit (ITC) that incentivize the building of more U.S. wind farms.

The committee on a final vote of 23-3 reported out a “tax extenders” bill preserving language that allows wind farms to qualify so long as they start construction while the tax credits are in place.

Those credits expired at the start of this year, again throwing the future of American wind energy into doubt once projects currently under construction are completed.

“This is a big step in the right direction,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA). The federal PTC and ITC are predominant drivers of new wind farm development, and have helped lower the cost of American wind power by more than half over the last five years, while making the U.S. number one in the world in wind energy production.

During the hearing, Senate Finance Committee Chairman Orrin Hatch (R-UT) regularly acknowledged the strong sense of bipartisan support for renewing the tax extenders package. Sens. Pat Toomey (R-PA), Dan Coats (R-IN), and Rob Portman (R-OH) withdrew amendments opposing the PTC, while Sen. Michael Bennett (D-CO) made the senators aware of the tremendous amounts of economic benefits and jobs wind power has created in Colorado.

In 2013, after the renewable energy tax credits were allowed to expire even briefly, installations of new wind farms fell 92 percent, causing a loss of 30,000 jobs across the industry that year. After Congress renewed the PTC, the U.S. wind energy industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.

Wind energy brings taxes and other revenues to rural communities, benefiting county and local services, schools, and health care and public safety facilities. With over 98 percent of all wind farms on private land, wind energy projects already deliver an additional $195 million a year in lease payments to landowners.

Earlier in the week, Sen. Chuck Grassley (R-IA) penned an op-ed renewing his call for Congress to extend the tax credits, saying they “bring certainty to investment that helps boost development, sustainability and expansion of homegrown renewable energy,” and that “the facts show that bringing stability and certainty to clean energy policy is good for the economy and the environment. Championing renewable energy that’s engineered by human ingenuity and produced by human hands builds upon America’s centuries-long promise of prosperity.”

Today, more than 70 percent of congressional districts contain operating wind turbines, wind-related factories, or both, according to industry data.

In June this year, proposed legislation threatened to eliminate the PTC. That led to 85 companies sending a letter to Congress to protest the bill saying if passed, the bill would “take away an effective, business tax incentive that creates jobs, drives rural economic development and reduces energy costs for Americans across the country.”

— Source: AWEA