Setting the record straight on the wind energy tax credit

Don Nickles recently misrepresented the position of the American Wind Energy Association on the Production Tax Credit (PTC). Let us be clear: As AWEA has consistently stated, and as the Government Accountability Office recently confirmed, without a long-term PTC extension U.S. wind power installations will drop, many communities will miss out on the economic opportunities that come with new wind farms, and American consumers will lose out. 

This one tax credit is the primary federal incentive for wind energy, and provides initial tax relief that has allowed wind industry to scale up against mature industries that continue to get a wide variety of permanent subsidies after up to 100 years. A typical wind farm more than repays all of this short-term tax relief in local, state, and federal taxes over the life of the project.

{mosads}Because of this policy, today, our industry has installed enough turbines to power the equivalent of over 18 million homes with clean electricity that will never run out. In parallel, the technology has advanced to a point where wind energy is now becoming cost-competitive with other sources.

We still have a long way to go before wind energy has reached its potential in America. More wind farms will help keep electricity prices affordable and stable, and cut pollution. Killing the PTC would result in fewer energy options for consumers and more price volatility.  

Polls find widespread support for the PTC among Republicans, Independents and Democrats. There are certain interests that manufacture opposition, however.

Nickles’ firm, for example, was paid over $1.4 million in 2014 to lobby for fossil fuels, including $200,000 to lobby against the PTC by Koch Industries, which has made billions in oil and coal.

In the most recent reporting period he was listed as a registered lobbyist for Exelon, a heavily nuclear utility that has been accused of undermining renewable energy, and that also opposes the PTC even though nuclear has its own major government incentives. In fact, the extent of Exelon’s support for clean energy – or lack thereof – is an issue in the utility’s current request to acquire the D.C.-area electric utility PEPCO, which is now pending before the D.C. Public Service Commission.

His attacks on recent renewable energy incentives are hypocritical, therefore, since he has advocated for subsidies for many mature energy sources that enjoy permanent tax incentives.

His column endorses a bill recently introduced by Reps. Marchant (R-Texas) and Pompeo (R-Kan.) that would not only eliminate the PTC going forward, but would retroactively change the rules on how projects qualify for the credit, as well as remove adjustments for inflation. 

Anyone in business will tell you that’s wrong. Anyone in the wind industry will tell you that “killing” the PTC in this way would essentially kill new development, kill thousands of jobs, and kill millions in future lease payments to American farmers and ranchers, not to mention tax revenue to improve schools, roads and other hometown infrastructure.

Contrary to erroneous claims by Nickles, AWEA has always stated that in order to reach our potential as an industry, we need a long-term extension of the PTC. We have consistently stated that only stable policy will allow us to meet the levels of wind deployment that the Department of Energy found are possible in its “Wind Vision” report.

While we agree it is time to end the expire-and-extend cycle for the PTC, our approach must be sound from an energy and fiscal policy perspective. We must find a bipartisan solution that avoids the loss of tens of billions in annual private investment to our economy, 30,000 well-paying jobs, and 92 percent of wind installations, as we saw the last time the PTC abruptly expired. 

AWEA is focused on such a bipartisan effort. The association has run ads praising champions of wind energy on both sides of the aisle. And campaign contributions from AWEA and our member companies support both Republicans and Democrats who recognize the importance of wind energy to their states’ and districts’ economies.

Finding a glide path for the wind industry shouldn’t be about “killing” anything or changing the rules in the middle of the game. Instead, if we focus on crafting a sound policy that is good for consumers, good for jobs and good for local communities, we all can win. 

Garland is CEO of Pattern Energy, and chair of the American Wind Energy Association. Reilly is the immediate past chair.