OVERNIGHT ENERGY: Wind industry floats tax phaseout plan

Source: By Zack Colman and Ben Geman, The Hill • Posted: Thursday, December 13, 2012

STATE OF PLAY: The wind industry is trying to break a Capitol Hill logjam by backing a phaseout of taxpayer support as it seeks to prevent an immediate cut-off of tax credits.

The American Wind Energy Association (AWEA) proposed Wednesday extending the 2.2-cent per kilowatt-hour credit for wind power production by one year, then phasing it out through the next five.

Fiscal conservatives on and off Capitol Hill have targeted the incentive this year, saying ending it would help reduce the deficit.

But the industry and its congressional allies say that ending the incentive now would be too abrupt and thwart wind power expansion.

AWEA CEO Denise Bode said the wind industry could become cost-competitive with other energy sources by the end of the proposed phaseout.

“With the policy certainty that accompanies a stable extension, the industry believes it can achieve the greater economies of scale and technology improvements that it needs to become cost-competitive without the” incentive, Bode said Wednesday in a letter to lawmakers.

The industry has consistently said it supports a phaseout. But until Wednesday it had been tight-lipped on the structure while it works to get an extension before the incentive expires Dec. 31.

The Truman National Security Project’s Operation Free campaign, which has worked closely with AWEA to secure an extension, supported the plan.

“Operation Free is proud to support the policy proposal announced by the American Wind Energy Association today, which would provide the long-term business certainty needed for the wind industry to continue to thrive,” Truman Project Executive Director Mike Breen said in a Wednesday statement.

And for her part, Sen. Lisa Murkowski (R-Alaska) — the ranking member on the Senate Committee on Energy and Natural Resources — has suggested such a five-year phaseout.

Read the full letter and phaseout plan here.