Iowa Senators fight for wind credits
A tax credit that benefits the wind power industry doesn’t expire for another year, but already the specter of congressional gridlock over its extension is slowing investment.
Iowa’s Senators Tom Harkin, a Democrat, and Chuck Grassley, a Republican, are leading an effort by 15 senators to get quick action on the credit, which provides a 2.2 cent per kilowatt-hour subsidy for the first 10 years of operation of a wind farm.
Grassley told Agriculture.com Tuesday that he doubts any effort to extend the tax credit beyond 2012 will come up this year. There will be time only to approve a spending bill for the federal government for the rest of this fiscal year and to extend a payroll tax cut that expires this month, he said. He hopes the Senate will act in January on the wind tax credit, known as the renewable energy production tax credit (PTC).
The industry would be affected by congressional inaction long before the credit expires a year from now, he said.
“When you get into March through June of next year, you’re going to find 4,000 people unemployed in Iowa,” from layoffs in the wind industry, Grassley said.
The 15 senators wrote the leadership of the Senate and the Senate Finance Committee last Friday to ask that the tax credit (PTC) be “part of any tax legislative vehicle as soon as possible.”
“The PTC plays a crucial role in the development and expansion of wind power. Historical data shows that wind turbine manufacturing and installations drop sharply whenever the availability of the credit is in doubt,” the letter says.
New wind power installations represented more than a third of the net increase in U.S. electricity generating capacity installed in 2010, the senators said.
Grassley was the only Republican to sign the letter. He said there’s a debate within his party’s caucus about the role of the federal government and tax credits in encouraging businesses development. Grassley said the critics are forgetting that federal government has helped the development of railroads with land grants and mining and forestry with leases on federal lands.
“I think a lot of people are forgetting that we wouldn’t have the country we have today if we didn’t have incentives for those things,” Grassley said.