Fight over PTC gains steam heading into lame duck

Source: Nick Juliano, E&E reporter • Posted: Wednesday, November 12, 2014

With lawmakers returning today for a postelection session in which tax policy is expected to be high on the agenda, the fight over a key renewable energy credit is picking up steam on and off Capitol Hill, sources said this week.

Eliminating the production tax credit has emerged as a top priority in the lame-duck session for a variety of conservative groups that are urging newly empowered Republicans to strip the credit from a broader “tax extenders” package that lawmakers from both parties have said they want to see passed before the end of the year.

That goal remains a heavy lift with Majority Leader Harry Reid (D-Nev.), a strong PTC supporter, still in charge of the Senate until January, but conservative groups are launching advertising and outreach campaigns urging Republicans on.

“There really is no compromise here,” said Thomas Pyle, president of the conservative American Energy Alliance (AEA). “I don’t see anything that could be construed a fair deal on this.”

Americans for Prosperity today will launch a $200,000 print-and-online ad campaign in 25 House Republican districts in states including Ohio, Florida, Texas and Virginia, a source familiar with the plans said yesterday. It comes on the heels of a letter the group sent lawmakers earlier this week urging opposition and tying the credit to the Obama administration’s broader climate agenda.

“Taxpayers are tired of being asked to indefinitely fund corporate welfare for the Obama administration’s favored industries,” AFP Director of Policy Mac Zimmerman said earlier this week.

AEA, which, like AFP, is linked to the billionaire industrialists Charles and David Koch, is planning a six-figure spending blitz that will include paid advertising and grass-roots activity in states including West Virginia and Kentucky, Pyle said.

Meanwhile, the Sierra Club, which supports the PTC, is planning its own lobbying push that will include advertising and a grass-roots push to secure renewal of the credit, although those plans, too, are still being finalized, said Dave Hamilton, director of clean energy for the group’s Beyond Coal campaign.

AFP is planning to run ads in local newspapers and online in the districts it is targeting, urging voters to call their member of Congress and urge him or her to go on record opposing the credit, the source said. AFP and AEA have spent years fighting the credit, which expired at the end of last year, arguing it is too expensive and amounts to a giveaway to companies that do not deserve it. AEA will focus its efforts on backing up supporters like Sen. Mitch McConnell (R-Ky.), who is going to become majority leader next year, and Rep. Shelley Moore Capito (R-W.Va.), who will be joining the Senate in January, as well as trying to persuade Republicans who otherwise might be open to supporting the credit.

Pyle said renewing the credit this year would amount to rewarding President Obama, Reid and other Democrats in the wake of an election that delivered large Republican gains.

“The president said elections have consequences,” he said.

Clean energy supporters dismiss groups like AFP and AEA as little more than fronts for the Koch brothers’ efforts to shape policy in line with their ideological and corporate interests. In the interview, Pyle was not overly perturbed by the accusation, calling it “something to live with” and insisting it does not resonate outside the Beltway.

“We’re happy to be working with organizations and companies like Koch that have the same perspective about markets and the role of governments and whatnot,” Pyle said, adding that one of the biggest downsides was the effect it has on fundraising.

“What I don’t like is that it deflates our good development team when the perception is that’s the only place we get our money,” he said.

Pyle noted that Democrats received ample outside help in the election from billionaire Tom Steyer and groups like the League of Conservation Voters. Gabe Elsner, executive director of the Energy and Policy Institute and a frequent Koch critic, said the comparison was unfair, given that Steyer and his allies spent a total of about $85 million compared with the $290 million reportedly spent by the Koch brothers’ network.

The Sierra Club’s Hamilton says AEA is disingenuous in its claim to welcome free markets, given the variety of permanent incentives for oil and gas companies that the group does not oppose. AEA and other conservative groups claim those tax breaks do not amount to subsidies because they just allow businesses to avoid paying taxes on expenses, as is the case with other industries.

“The fossil giants have historically raked in many more billions of dollars in subsidies of their own,” Hamilton wrote in an email. “Further, we often forget to count the off-budget subsidies conveyed to polluters by being allowed to dump their combustion waste into the environment, warming our atmosphere and fouling our groundwater, rivers and streams, lands, and lungs — thus generating additional billions in health and environmental costs that must be borne by society at large.”

Wind industry officials remain cautiously optimistic that the PTC will win an extension in the lame duck, given the strong support it enjoys from Reid, Finance Chairman Ron Wyden (D-Ore.) and Republicans like Sen. Charles Grassley (Iowa), as well as the fact that it is baked into a larger extenders package that has items most Republicans support, such as bonus depreciation or the research-and-development tax credit. Peter Kelley, a spokesman for the American Wind Energy Association, cited an AEA poll that showed 51 percent of voters thought it was a “good thing” the PTC exists.

“The AEA’s own polling showed they’re out of step with the majority of Americans in both parties who support the production tax credit and want wind energy to keep growing,” Kelley said in an email. “Now they’re trying to change that by spending more money, which comes straight from competing forms of energy. It won’t work.”

The same AEA poll showed larger majorities thought it was bad the credit could supplant cheaper gas- or coal-fired power and that having it in place since 1992 was “long enough.” It also showed a split in support for renewable energy, depending on how the question was phrased: 62 percent said it was mostly good that U.S. EPA’s climate rule would “require states to generate a certain amount of energy from renewable sources,” but 60 percent thought it was bad that the rule “would require states to impose mandates on their citizens to buy certain amounts of renewable energy, whether or not it is cost effective.”

AFP’s ad campaign is targeting Reps. Gus Bilirakis (R-Fla.), John Mica (R-Fla.), Larry Bucshon (R-Ind.), Kevin Yoder (R-Kan.), Sam Graves (R-Mo.), Blaine Luetkemeyer (R-Mo.), Mark Amodei (R-Nev.), Renee Ellmers (R-N.C.), Bob Gibbs (R-Ohio), Bill Johnson (R-Ohio), Michael Turner (R-Ohio), Bill Shuster (R-Pa.), Glenn Thompson (R-Pa.), Kay Granger (R-Texas), Michael McCaul (R-Texas), Scott Rigell (R-Va.), Rob Wittman (R-Va.), Kristi Noem (R-S.D.), Kevin Brady (R-Texas), Vern Buchanan (R-Fla.), Adrian Smith (R-Neb.), Erik Paulsen (R-Minn.), Jackie Walorski (R-Ind.), Ann Wagner (R-Mo.) and Chris Stewart (R-Utah).