Wind power's primary incentive, the federal wind energy Production Tax Credit (PTC), should be extended immediately, representatives of two American wind turbine component manufacturers told a U.S. Senate tax subcommittee yesterday.
Speaking before the Senate Finance Subcommittee on Energy, Natural Resources, and Infrastructure, spokesmen for Leeco Steel and TPI Composites described their companies' involvement in the rapidly growing wind power manufacturing supply chain and made the case for extending the PTC beyond its currently scheduled expiration date at the end of this year.
John Purcell, Vice President of Wind Energy for Leeco Steel, said his firm “feel[s] it is imperative that the PTC be extended in its full form as presented in S. 2201, the American Energy and Job Promotion Act, which was recently introduced by Senators Grassley and Mark Udall.” (See Bipartisan group of Senators introduces bill to extend PTC, March 16.) Added Purcell:
Leeco Steel is a wholly owned subsidiary of O’Neal Steel, the largest privately held metals distribution company in the United States, which is headquartered in Birmingham, AL. Headquartered in Lisle, IL, a western suburb of Chicago, Leeco Steel is a carbon, high-strength low-alloy steel plate distributor and processor serving the United States, Mexico and South America from seven locations throughout these regions. We have distribution facilities in Portage, IN, Oshkosh, WI, Pittsburgh, PA, Chattanooga, TN, and Fort Worth, TX.
Leeco Steel first began delivering steel plates and fabricated plate products into the wind industry in 2004. Revenue from the wind industry now accounts for nearly 40% of our company’s total revenue. The wind business … has become a keystone of our overall business and a driver for development of our company. Leeco Steel has provided hundreds of thousands of tons of steel plates to 12 tower manufacturing facilities in 12 states across America, most of which have been built in the past eight years. The PTC has helped us to expand our company in the wind industry and into new markets, and has helped us weather the recent economic downturn. Since the early development of our wind business, we have hired over 70 people at Leeco Steel to help maintain the growth strategies that we have planned for our company.
In the past six years, when there has been certainty of a PTC, our wind business and the wind industry overall has been a major job creation success story. Of the 12 tower factories mentioned above, 10 … did not exist before 2002. Taking an average of 250 employees per factory, that is 2,500 new good paying jobs that were created in a very short amount of time within our supply chain alone. This does not take into account the thousands of additional jobs that exist in the supply chain that supplies goods and services to each of these 12 factories …
With an immediate extension of the PTC, the development and construction of these turbines can continue as planned. The tens of thousands of jobs that can be created with this extension will allow the wind industry to not only continue being a leader in job creation, but help secure our nations’ energy future by lessoning the reliance on foreign sources of energy. The PTC is also crucial for regaining our nation’s leadership in new technology and innovation that will keep our economy competitive. The wind industry is on the verge of becoming competitive without the PTC, but failing to extend the PTC immediately would prevent us from finishing the job.
John P. Ragan, Vice President of Business Development and Government Affairs for TPI Composites, told of how, thanks to the PTC, his company has brought new manufacturing jobs to the town of Newton, Iowa:
The resurrection of Newton, Iowa is a terrific American story. Newton is a city of roughly 16,000 residents, located 35 miles east of Des Moines. For many years, Maytag manufactured washers and dryers and maintained its corporate headquarters in Newton, employing 3,500 at its peak. After being acquired by Whirlpool in 2006, plans were made to consolidate manufacturing into existing facilities in Ohio and Mexico. The remaining 1,900 employees in Newton lost their jobs, the last on October 25, 2007. Because of the growth in the wind industry, much of it stimulated by the federal PTC, TPI built a plant in Newton in 2008 and today employs almost 800 people in the Jasper County region. TPI was not the only company who recognized the opportunity. Soon after TPI’s arrival in Newton, Trinity Towers opened its facility on the abandoned Maytag campus, and hired over 125 employees to provide towers to many of the same customers and wind farms to which TPI supplies blades. Second only to Texas for installed megawatts of wind, the state of Iowa is now getting 20% of its electricity from wind energy and employs thousands of citizens across the state. Newton and Iowa are shining examples of how to create a U.S. wind energy hub – none of which could have occurred without the PTC.
Although the PTC technically expires at the end of 2012, practically it has already expired as the delay in extending the renewable energy credits is reducing investment in wind energy projects scheduled to come on line in 2013. Wind power plants and the component supply chain require months, if not years, of planning. Wind investors and suppliers like TPI want to know what tax policies will apply before they commit to projects for the next calendar year …
The PTC is an effective tool that drives as much as $20 billion a year in private investment and is at the heart of one of America’s fastest growing manufacturing sectors. The PTC is not a handout. It is a business tax credit, with funding based solely on project performance, not evaluation by government officials. With a stable, low tax rate, American wind power has provided more than a third of all new electric generating capacity across the U.S. in recent years and has kept the industry on track toward supporting 500,000 American jobs by 2030 …
Our hope is that industry and Congress can work together to reevaluate the PTC in a manner that:
• Enables the wind industry to continue its rapid growth as we chart a course to providing 20% or more of our nation’s electricity from wind by 2030;
• Generates higher volume and more stability in demand – the lifeline to any successful manufacturing operation; and
• Provides investors with the confidence needed to fund new regional manufacturing facilities, which will create more cost-effective U.S. plants, which will, in turn, create stable U.S. manufacturing jobs.
Broad support exists across the political spectrum for extending the PTC. It is critical that this Congress act quickly to find a way through the current impasse and enact an immediate extension of the PTC. This is the starting point for U.S. job creation, a healthier economy and a cleaner energy future.
A House bill seeking to extend the PTC has 85 cosponsors, including 18 Republicans, and has received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association, while a Senate bill to extend it was introduced March 15 by seven Senators, including three Republicans. A PTC extension also has the support of the U.S. Chamber of Commerce and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S.
WindTV: Colorado county gets big boost from wind power, March 26, 2012
Former Congressman Boucher sees PTC extension likely, March 26, 2012
WindTV: Wind power breathes new life into small Colorado town, March 21, 2012
Citing need for certainty, BP's Landis calls for PTC extension, March 20, 2012
In op-ed, Kansas Governor, Senator call for PTC extension, March 19, 2012
Bipartisan group of Senators introduces bill to extend PTC, March 16, 2012
Houston Chronicle editorial supports PTC extension, March 15, 2012
Southern Alliance head urges: Extend the PTC, March 14, 2012
WindTV: Missouri manufacturer grows with the wind, March 12, 2012
WindTV: An American family, powered by a paycheck from wind, March 5, 2012
Salazar, citing 'race we cannot cede', backs extending PTC, March 1, 2012
Kerry, Brown win praise for bipartisan support of PTC extension, February 29, 2012
Wichita Eagle editorial blog endorses PTC extension, February 28, 2012
Daily Oklahoman: PTC extension “makes sense,” February 27, 2012
Bipartisan group of Illinois Representatives supports PTC extension, February 24, 2012
Kansas City Star backs PTC extension, praises Brownback, Moran, February 23, 2012
Bennet visits composites factory, urges PTC extension, February 23, 2012
Moran visits Siemens factory, pushes PTC extension, February 22, 2012
WindTV: PTC key to wind power manufacturing jobs, February 21, 2012
Topeka Capital-Journal: Extend the PTC, February 21, 2012
U.S. Rep. Steve King (R-IA): PTC is jobs engine conservatives should support, February 17, 2012
Bennet, Moran continue bipartisan push to extend PTC, February 16, 2012
Major U.S. consumer brands like Nike on extending the PTC: Just Do It!, February 15, 2012
Oklahoma Gov. Fallin urges conferees: Extend the PTC, February 15, 2012
Michigan worker's plea: Extend PTC, help wind power create U.S. jobs, February 13, 2012
Senate Energy Chairman Bingaman: Act now to save clean-energy jobs, February 9, 2012
Republican governors push for PTC extension; Senators express support, February 2, 2012
WindTV: Wind power drives commerce in small-town America, January 24, 2012
Denver Post endorses PTC extension 'sooner rather than later', January 18, 2012
WSJ op-ed: 'Want Growth? Try Stable Tax Policy', January 5, 2012
Red State Energy, Red State Jobs, November 29, 2011