But opponents are boosting their efforts to kill the tax credit as Congress resumes work this week to grapple with the nation’s huge deficit. A group tied to the oil industry is circulating a study saying it’s time for wind to stand on its own without the help.
Kansas Republican Gov. Sam Brownback told reporters recently that the booming wind development in his state is headed toward zero next year without the tax break.
“That shows you how dramatic the impact is,” Brownback said. “With the extension of the production tax credit, there will be much more wind investment, much more wind electricity that’s produced.”
But markedly absent from the Governors’ Wind Energy Coalition is Texas Gov. Rick Perry, whose state is the national leader in wind installations and home to four of the top five wind farms in the nation. Perry has called for an end to federal energy subsidies, including for oil and renewables.
The wind tax break allows power producers to lower their tax payments by 2.2 cents for each kilowatt-hour of electricity they produce in the first decade of a wind project. It can cut the cost of a project as much as one-third.
Navigant Consulting has estimated that loss of the tax credit could cost 37,000 jobs. That’s nearly half the wind industry jobs in the United States. The study was commissioned by the American Wind Energy Association, a trade group that has spent more than a million dollars lobbying this year to save the tax credit.
Iowa Republican Sen. Charles Grassley is the wind industry’s champion in the Senate. He said Tuesday that a one-year extension of the tax credit would cost the treasury around $4 billion or $5 billion. “The credit has been tremendously successful for renewable energy development and job creation,” Grassley said.
Grassley said the fate of the tax break hinges on talks between the president and congressional leaders on the nation’s looming “fiscal cliff.”
“Right now all the strategy and process is on hold to see how talks between Speaker (John) Boehner and President (Barack) Obama go,” he said.
Wind energy is hardly alone in getting federal help. Obama has said he wants to end $4 billion in annual tax breaks for the oil industry, and the American Petroleum Institute is launching an ad campaign trying to preserve its tax status in the deficit talks.
Conservative groups are pressuring Congress to kill the wind tax break.