Republican governors Terry Branstad of Iowa and Sam Brownback of Kansas provided some very specific support for the federal wind energy Production Tax Credit (PTC) yesterday, urging members of the Congressional conference committee on the payroll tax deduction legislation to include a PTC extension in the bill. Prospects for a PTC extension were also buoyed by positive comments from several Senators, both regarding the PTC and willingness to consider extending expiring tax provisions, during a hearing Tuesday.
In making their plea, Branstad and Brownback called for an “all-of-the-above” energy policy that promotes a diverse portfolio of domestic energy resources, adding, “The wind energy sector is an American success story that is helping us build our manufacturing base, create jobs, lower energy costs, and strengthen our energy security. Our states have experienced the economic benefits of wind energy first hand, and we cannot overstate the importance of extending this tax provision early in the year so the wind industry has the certainty it needs to grow.” The full text of the letter is below and in the PDF linked above.
During the Senate Finance Committee hearing Tuesday, Committee Chair Max Baucus (D-MT) said he will consider adding extensions of some expiring tax provisions to the payroll bill. Baucus said he would be talking with conference committee members about the cost and popularity of the expiring provisions to get a sense of which ones might be added.
Other encouraging comments included:
– Sen. Chuck Grassley (R-IA), ranking minority member of the Senate Finance Committee: “Now, more than ever, the U.S. needs to ramp up domestic energy production from all sources: oil, gas, biodiesel, solar, wind, and others. Aside from energy independence as a national security matter, it is important to note the number of domestic jobs that rely on the energy industry. Without these tax provisions, all of that will be at risk.”
– Sen. Benjamin Cardin (D-MD): “We should pursue all options for energy development, and failure to act on these expiring energy credits would have a major negative impact. The wind industry needs the credits by March or April, or it faces a catastrophic contraction.”
– Sen. John Thune (R-SD): “The wind production tax credit comes to mind. Many of these provisions have a long lag time. I would say that this should put even more urgency behind the efforts for fundamental reform. If we can’t do that soon, we need to figure out how to give economic certainty to Americans.”
Legislation extending the PTC 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, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. 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.
—– Text of Branstad-Brownback letter —–
February 1, 2012
Dear Conference Committee Members:
As you draft legislation to address the expiring payroll tax cut and other provisions, we urge you to include an extension of the wind energy production tax credit (PTC), currently set to expire at the end of this year. The wind energy sector is an American success story that is helping us build our manufacturing base, create jobs, lower energy costs, and strengthen our energy security. Our states have experienced the economic benefits of wind energy first hand, and we cannot overstate the importance of extending this tax provision early in the year so the wind industry has the certainty it needs to grow.
As a country, we should support energy diversity and development of all domestic resources, creating an “all of the above” energy strategy. In order to prevent the nation from being too heavily reliant on a single energy source, our state and national energy plans have long relied on varying policies and incentives, such as the PTC, to deploy technologies that ensure a diverse, domestic energy fleet.
The American wind industry now includes over 400 manufacturing facilities in 43 states. At least 60 percent of the value of a wind turbine is now produced domestically, compared to just 25 percent prior to 2005. Unfortunately, the leading wind project developers and manufacturers are canceling their plans for 2013 and wind development will grind to a halt due to the uncertainty of a PTC extension. Few, if any, developers have projects scheduled for 2013 and many are beginning to lay off employees. The ripple effect of this slowdown means reduced orders for turbines and decreased business for the hundreds of manufacturers who have entered the wind industry in our states. A recent report completed by Navigant finds that an expiration of the PTC would lead to a nearly 50 percent decrease in the number of wind energy jobs.
The PTC was originally developed and enacted into law with strong bipartisan support that continues today. It is a tax policy that has been successful, and we urge you to act expeditiously to extend the wind energy PTC. Thank you for your time and consideration.
Terry E. Branstad
Governor, State of Iowa
Governor, State of Kansas