Brownback joins other governors in call for wind energy tax credit extension

Source: By Dion Lefler and Sean Cockerham, The Wichita Eagle • Posted: Wednesday, November 14, 2012

Gov. Sam Brownback and three other governors called on Congress on Tuesday to extend tax credits for wind energy before they expire at the end of the year.

Brownback joined Govs. Terry Branstad, R-Iowa; John Hickenlooper, D-Colo.; and John Kitzhaber, D-Oregon, in a conference-call urging Congress to extend the subsidies for wind energy during the upcoming lame-duck session, the period between the election and when new members take their seats in January.

Nurturing wind power has been a priority of the past three Kansas governors because of the state’s abundant wind and open land for wind farms.

This year, nearly $3 billion of investment representing 1,400 megawatts of capacity has come online in Kansas alone, Brownback said.

“I dedicated three wind farms in one day in Ford County, that’s out by Dodge City,” he said. “Chicago may be the Windy City, but Ford County is the Windy County.”

But Brownback and the other governors said wind power has been slowing down because of uncertainty over the tax credit.

“We have virtually no new wind operations going in next year after nearly $3 billion in investment this past year,” Brownback said. “That shows you how dramatic the impact is of the production tax credit.

“With the extension … there will be much more wind investment, much more wind electricity produced, and much greater opportunity for us to become the renewable state.”

Brownback noted that there have also been layoffs at the Siemens wind turbine factory in Hutchinson.

“I strongly support this extension of the production tax credit so we can continue to build wind energy and these jobs and the electricity associated with it,” Brownback said.

Brownback faces a divided Kansas congressional delegation.

Reps. Mike Pompeo, R-Wichita and Tim Huelskamp, R-Fowler, oppose extending the credits.

Republican Sens. Pat Roberts and Jerry Moran are in favor of it. Rep. Lynn Jenkins, R-Topeka, said in a statement that she would support an extension but wants to see the credit phased out over time as part of comprehensive tax reform negotiations.

Staff for Rep. Kevin Yoder, R-Overland Park, and Pompeo, did not return phone calls and e-mails seeking comment.

In an opinion piece for Politico in August, Pompeo explained his opposition to extending the credit.

“Wind companies and their lobbyists have, for the last year, been telling all who would listen that the expiration of the tax credit could spell doom for their industry,” he wrote. “(President) Obama repeats this claim regularly on the campaign trail. But what does that say about the industry? If you need a tax credit to compete, you are probably not that competitive.”

Westar Energy, Kansas’ dominant power company, is remaining neutral on the wind credits, said spokeswoman Erin La Row.

To meet a state mandate, Westar has built or contracted for 650 megawatts of wind energy, roughly enough to power the city of Topeka, La Row said.

The wind tax break allows power producers to lower their tax payments by 2.2 cents for each kilowatt-hour of electricity they produce in the first decade of a wind project. It can cut the costs of a project as much as a third.

Navigant Consulting, which is headquartered in Chicago, has estimated that loss of the tax credit could cost 37,000 jobs nationwide. That’s nearly half the wind industry jobs in the United States. The study was commissioned by the American Wind Energy Association, a trade group that has spent more than $1 million on lobbying this year to save the tax credit.

Iowa Republican Sen. Charles Grassley is the wind industry’s champion in the Senate. He said Tuesday that a one-year extension of the tax credit would cost the treasury around $4 billion or $5 billion. “The credit has been tremendously successful for renewable energy development and job creation,” Grassley said.

Grassley said the fate of the tax break hinges on the deficit talks between the president and congressional leaders on the nation’s looming “fiscal cliff.”

“Right now all the strategy and process is on hold to see how talks between Speaker (John) Boehner and President (Barack) Obama go,” he said.

Wind energy is hardly alone in getting federal help. Obama has said he wants to end $4 billion in annual tax breaks for the oil industry, and the American Petroleum Institute is launching an ad campaign trying to preserve its tax status in the deficit talks.

Conservative groups are ramping up pressure on Congress to kill the wind tax break. The American Energy Alliance commissioned a study of whether the tax credit is necessary for wind energy by Louisiana State University Professor David Dismukes, saying the wind industry doesn’t need a government subsidy and it’s time to remove “Big Wind’s training wheels.”

The president of the American Energy Alliance was a lobbyist for the National Petrochemical and Refiners Association, according to the Center for Public Integrity, a government watchdog. The group is tied to the Institute for Energy Research, which in the past has received oil industry funding.