A coalition of 102 conservative groups are pressing Congress to end federal subsidies to the wind power industry, arguing that 20 years of taxpayer support has yielded no benefit.
“The principal federal support for the wind energy industry is scheduled to expire at the end of this year,” reads the letter from the conservative groups led by Americans for Prosperity. “The undersigned organizations and the millions of Americans we represent stand opposed to extending the production tax credit (PTC).”
The federal Wind Production Tax Credit was extended until the end of 2013 as part of last year’s deal to avoid government spending cuts and sharp tax increases. The extension split Republicans, pitting lawmakers from wind states against those from non-wind states.
Iowa Republican Sen. Chuck Grassley has been a strong proponent of keeping in place taxpayer subsidies for wind power, but has also supported phasing out the subsidies over time so the industry can become self-sufficient.
“Continued investment in wind-energy production emphasizes the value and success of the federal production tax credit,” Grassley said. “Wind energy has proven that it’s a force in America’s energy supply, providing clean, renewable, and home-grown power. Wind energy comes from local farms, it’s for local customers and, most often, it adds investment value to local communities.”
However, wind power has been receiving subsidies since 1992, according to conservatives, with little to show.
“The wind industry has very little to show after 20 years of preferential tax treatment; it remains woefully dependent on this federal support,” wrote conservative groups, including the American Energy Alliance, FreedomWorks and the R Street Institute. “Yet despite this consistent under-performance, Congress has repeatedly voted to extend the PTC, usually in 1- or 2-year increments.”
According to the Joint Committee on Taxation, the wind PTC extension will cost $12 billion. As the expiration date for the tax benefit’s expiration comes closer lobbying on the credit has intensified
In October, the Western Governor’s Association sent lawmakers a letter urging them to relax the definition of which wind projects qualify for subsidies. The governors wanted to extend subsidies to projects under construction rather than those already generating power.
“Changing the [PTC] to a ‘commence construction’ standard would allow these industries to make full and effective use of the 30 percent investment tax credit for the duration of its existing authorization… and will allow them to attract further investment — driving industry and job growth in our states,” reads the governors’ letter to Congress.
In contrast, conservative groups are ramping up their campaign to end the wind subsidy, asking ten lawmakers to sign a letter being circulated by Kansas Republican Rep. Mike Pompeo opposing the wind PTC’s extension.