Wind Tax Credit Stalls in Congress Despite Bipartisan support. So what’s the Disconnect here?
April 25, 2012
Politico has an informative piece on the current impasse surrounding the much-needed passage of a Production Tax Credit for Wind Energy (link below).
The article mentions my congressman, Dave Camp, who is chairman of Ways and Means – a position that is usually prefaced in journalism with the qualifiers “the powerful”, or described as being one of the most important legislative posts.
Well, I went to high school with Dave. He’s a nice guy. My wife has taught his kids. He’s a good Father, clearly. We agreeably disagree on almost everything, and I try to restrain myself from beating him up too often for ignoring my early warnings on that nasty Iraq business.
I met with him last fall and discussed the the Wind Production Tax credit, which is vital to keep a consistent, predictable playing field for one of the 21st century’s most important industries. (video coming very soon on this) I spent an hour on the phone with a couple of his staffers afterward. They were polite and well spoken.
But damned if I can tell what he thinks about it, or what he’s doing on it. Turns out some of his colleagues are a little confused as well.
Congress is taking the wind out of turbine sales.
And that’s despite support from President Barack Obama, the U.S. Chamber of Commerce and a substantial roster of House Republicans who see extending the wind tax credit as an electoral imperative.
Rep. Dave Reichert (R-Wash.) is so frustrated he’s thought about trying to go over House Ways and Means Chairman Dave Camp’s head to get legislation moving.
The credit doesn’t expire until the end of this year, but turbine makers are already feeling pain because developers can’t afford to lay bets that Congress will sort it out later.
The bottom line: It takes a long time to get projects up and running, and, amid tight budgets, subsidy scandals and election-year politics, there’s no guarantee that this tax break will catch a tailwind in time to avoid a crippling interruption in production.
On one level, the wind credit is just another casualty of the ongoing tussle between conservative budget hawks who want to rein in government spending and business-minded Republicans who support subsidizing industrial innovation. But what makes this tax break unusual is the damage that’s already being done — and the possibility that inaction could devastate an industry that Congress has propped up for two decades.
“It’s a horrible way to do business,” Rep. Steve LaTourette (R-Ohio) said. “But that’s the way the place works.”
Bottom line, if congress is serious about defunding all energy subsidies and making a truly level playing field, well and good, then start with the oil companies, and by the way, tell them they have to keep the Strait of Hormuz open on their own dime.
But if not, check the graph above. It shows what has happened in the past when congress has made a political football of the PTC. Last time it expired in 2004, the industry had a 77 percent drop the following year. It’s not because wind can not be competitive without subsidies, any more than oil and gas needs them – but predictability is the number one thing you have to give business people if you expect them to make long term investments, and we have not been doing that.