Conservative group slams GOP push for wind credit in tax cut bill

Source: Elana Schor • E&E • Posted: Friday, February 3, 2012

A show of support from two Midwestern GOP governors for a wind-industry tax credit yesterday drew fire from Washington conservatives, underscoring the hard road for renewables advocates pushing to extend the break.

Advocates of extending the production tax credit (PTC) for wind, set to expire at year’s end if Congress does not act, hailed a letter released yesterday by Republican Govs. Sam Brownback of Kansas and Terry Branstad of Iowa that warned of job losses and squandered power-generation potential if the benefit were not re-upped.

“In order to prevent the nation from becoming 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 Republican duo wrote to bipartisan negotiators now working on a long-term payroll tax-cut package.

The wind credit is one of several “extenders” hotly sought by the renewables industry that Senate Finance Chairman Max Baucus of Montana, Democrats’ top emissary to the payroll-tax conference, is pushing to include in any final deal (E&E Daily, Feb. 1).

But Baucus could face an uphill battle in convincing House Republican conferees to add the tax extenders to a payroll tax-cut bill, if the conservative Heritage Foundation has anything to say about it. Nick Loris, an energy policy analyst at the think tank influential with many in the Republican caucus, yesterday slammed Brownback and Branstad’s letter as equivalent to endorsing subsidies for outmoded VHS tapes.

A study cited by the governors that letting the wind credit expire would lead to nearly 50 percent fewer wind-energy jobs, Loris wrote in a blog post, “means two things: 1.) The subsidy has been artificially propping up jobs in the industry and shifted labor and capital away from other, more productive sectors of the economy; and 2.) Wind can compete without subsidies and the industry won’t entirely disappear.”

Heritage’s dogged opposition to federal support for an array of energy-sector benefits was a contributing factor behind one senior House Republican’s recent decision to put aside his legislative efforts to direct a no-bid federal contract to a uranium re-enrichment company that would create jobs in his home state (E&ENews PM, Jan. 19).

Despite the conservative group’s mounting opposition, Sen. Ben Cardin of Maryland — one of Baucus’ fellow Democratic conferees — said yesterday that “there are a lot of members” of the talks on both sides of the aisle “who understand the importance of the extenders.”

“I think there’s interest” in making the tax credits part of a final deal that must be reached by Feb. 29, Cardin added.