Carper to bring investment tax proposal to supercommittee

Source: Phil Taylor • E&E • Posted: Thursday, October 13, 2011

Sen. Tom Carper (D-Del.) yesterday said he plans to meet with all six Senate members of the Joint Select Committee on Deficit Reduction to discuss his proposal to extend investment tax credits for offshore wind farms.

Carper, who in July introduced a bipartisan proposal with Sen. Olympia Snowe (R-Maine) to extend the tax credits to the first 3,000 megawatts of offshore wind facilities to go into service, said he planned to meet committee members in the next 10 days (E&ENews PM, July 21).

“We need to extend the investment tax credits sooner rather than later,” Carper said of the program set to expire in December 2012. “This is certainly something I’ll be raising with Senator [Max] Baucus [D-Mont.].”

Baucus is chairman of the Senate Finance Committee and is one of 12 members on the deficit reduction panel, which has until Thanksgiving to identify $1.5 trillion in deficit reductions over the next 10 years.

While the tax credits are seen as a crucial tool to encourage investment in new wind farms off the Atlantic Coast, observers say they face long odds to be included in the deficit committee’s package. Republican senators on the “supercommittee” are Jon Kyl of Arizona, Rob Portman of Ohio and Pat Toomey of Pennsylvania; Democrats include Baucus, John Kerry of Massachusetts and Patty Murray of Washington.

Republicans in both chambers have raised alarm over government-backed renewable energy projects after the recent bankruptcy of Solyndra, which defaulted on a half-billion-dollar Energy Department loan.

Carper said Congress should continue to investigate the Solyndra case before shifting policies. Renewing the investment tax credit continues to be one of his and Snowe’s top priorities, he said.

“I don’t know that we’ve learned all that we need to learn about what went wrong in that project,” he said. “We need to get to the truth and see that we can learn from the truth.”

Carper’s push comes as developers convene in Baltimore for the American Wind Energy Association’s national offshore wind conference.

Industry officials there touted steps by the Obama administration to fast-track the leasing process in federal waters and offer $43 million to boost technical innovations and lower development costs. Interior Secretary Ken Salazar this week announced his agency could issue the country’s second-ever offshore wind lease — this one off the coast of Delaware — within weeks (E&E Daily, Oct. 12).

Industry officials also said the tax credits are critical to help defray the cost of producing offshore wind, which involves new technologies and higher installment hurdles and currently lacks a transmission grid.

“Earlier extensions are important for financing” and for the supply chain, said Chris Long, manager of offshore wind and siting policy at AWEA. “People aren’t ordering turbines for 2013 because the tax incentives aren’t in place. We’re seeing manufacturing layoffs now in some cases as a result of that.”

Carper’s bill (S. 1397) would require the Treasury Department to consult with the Energy and Interior departments when setting up the credit program, but Treasury would have the final say on which companies receive a credit. Once awarded a credit, companies would have five years to install the wind facility. And companies could not receive other production or investment tax credits under the language.

Senate co-sponsors of the legislation include Republican Susan Collins of Maine and Democrats Robert Menendez of New Jersey, Chris Coons of Delaware, Sheldon Whitehouse of Rhode Island and Sherrod Brown of Ohio.