Need for wind energy tax credit debated

Source: By Trish Choate, San Angelo Standard-Times • Posted: Monday, August 18, 2014

Reps say it’s time to wean industry off help

WASHINGTON — An environmental group is criticizing U.S. Reps. Mike Conaway and Randy Neugebauer over the expiration of the Wind Energy Tax Credit, but the two West Texas congressmen say sooner or later wind energy must stand on its own.

The Sierra Club in a set of political ads attack Conaway and Neugebauer, saying they’re “doing nothing while Texas wind jobs blow away.”

The Sierra Club isn’t alone in touting wind energy’s economic benefits in hopes of getting congressional backing for the credit.

Wind industry advocate Greg Wortham says turbines turning in the big Texas sky brought everything from well-paying work to artificial turf on football fields.

“Until Congress let the tax credit expire, it was driving … skilled manufacturing, the steel industry, exports to foreign countries, foreign investments,” said Wortham, executive director of the Wind Energy Consortium and the Cline Shale Alliance.

Wortham also is a political hopeful, having recently announced he is running for Texas Senate District 28 as a Democrat. He is in a field of six candidates for the special election Sept. 9 called by Gov. Rick Perry to replace Robert Duncan, who left the seat to take the chancellor’s job at Texas Tech University.

Neither Conaway, a Midland Republican, nor Neugebauer, a Lubbock Republican, appeared to think they’d suffer politically because of Sierra Club attacks. Both are running for re-election in the November midterms.

Both said they support wind, but change is necessary for the tax credit.

“The Sierra Club has never been one of my big fans to begin with, so I’m not surprised,” Neugebauer said.

He said it’s time to see if wind energy can stand on its own without government support.

Conaway, who called the Sierra Club a “radical group,” said he’d like to see a five-year step-down of the credit — not the sudden cliff brought on by its latest expiration.

Texas leads the nation in wind energy production, boasting enough turbines to power 3.3 million homes and 10,000 wind-related jobs, according to the American Wind Energy Association.

Neugebauer’s 19th Congressional District is No. 1 in the country in installed wind capacity, and Conaway’s 11th Congressional District is No. 6, according to AWEA.

Wortham and AWEA point to the on-again, off-again tax credit as key to wind energy success.

“The significant drop off we see when the credit expires illustrates its effectiveness and importance,” said Rob Gramlich, AWEA senior vice president of government and public affairs. The credit pays 2.3 cents per kilowatt-hour of electricity to developers over the first 10 years of a new project’s life. It expired last year except for projects under construction before Jan. 1.

The Union of Concerned Scientists says lawmakers’ dithering between extending the credit and allowing it to expire “has wreaked havoc on the wind industry.”

In 2012, for instance, new installed wind energy capacity was 13,131 megawatts, according to the union. In 2013, there was about a 90 percent drop to 1,087 megawatts of new capacity.

“What you saw is a rush to try to get as much down before the tax credit expired,” Conaway said.

Conaway said the megawatts in 2013 indicate “wind power can still be installed without the tax credit being part of the basis to make the economic decision to install wind.”

John Tough, of Choose Energy, said the credit’s expiration was alarming and might affect consumers’ pocketbooks.

“Overwhelmingly, Texans more than anybody else will select a green energy plan, even if it’s a bit more expensive,” said Tough, vice president of operations and business development for the deregulated market shopping comparison site for energy.

But the loss of the credit could mean higher prices for consumers, he said. Continued demand with a finite number of wind farms could push the price up, and without a credit that 2.3 cents could shift over to consumers.

In another state where wind is important, a group of lawmakers led a push to renew the tax credit this summer.

“Wind power is crucial for American manufacturing,” U.S. Rep. Tammy Duckworth, a Democrat from Illinois, said in a statement. “It is a great example of how, with smart investment, we can pave the way for American businesses to build, innovate, and create competitive, well-paying jobs right here in the U.S.”

Congress has left town until after Labor Day without taking action.

Gramlich said AWEA is optimistic the credit will be renewed this year, most likely by a lame-duck Congress.

“There is some confusion, we think, in some members’ minds because many of them don’t realize that there are actually federal incentives for all power sources currently,” he said.

The way Wortham sees it, Washington is the problem.

“When President Bush was president, it was all good. We switched presidents, and suddenly the same issue and the same investment became bad,” Wortham said. “That’s not the way it works out here. That’s the way it works in Washington.”

The Sierra Club’s efforts to move the tax credit forward have involved online ads, targeted to 25 House districts, including Conaway and Neugebauer.