Payroll tax bill ‘the last chance’ to extend wind energy tax credit — industry panel

Source: Nathanael Massey • E&E • Posted: Friday, February 10, 2012

Wind energy producers will have to start downsizing operations and laying off workers if Congress does not move swiftly to extend the production tax credit for wind energy, CEOs of wind energy companies said yesterday.

Tagging the extension onto the payroll tax bill, which renews a tax cut set to expire at the end of February, may be “effectively the last chance” to put that extension through in the first quarter of 2012, they said.

“As far as I’m concerned, [the payroll tax bill] is our best chance to get it done,” said John Purcell, vice president for wind energy at Leeco Steel. The steel industry is already facing a gap in new orders starting in 2013, due to uncertainty over the tax credit’s future, he said.

Purcell spoke alongside other industry representatives yesterday morning at a panel organized by the American Wind Energy Association.

The production tax credit is not set to expire until the end of 2012. However, given the time needed to secure materials, manufacture parts and assemble turbines, the tax credit has already essentially passed its deadline, industry representatives said.

Bipartisan legislation by Rep. Earl Blumenauer (D-Ore.) and Rep. Dave Reichert (R-Wash.) seeks to grant a four-year extension to the tax credit. Senate Finance Chairman Max Baucus (D-Mont.) has vowed to see the extension added to the payroll tax bill.

Lobbying the House for a one-year extension

However, the measure faces an inclement climate in the House, where Republicans continue to rail against green-energy subsidies in the wake of solar giant Solyndra’s collapse last fall.

Many of the panelists said yesterday that they would be approaching their state representatives with a more modest, but no less urgent, proposal of a one-year extension of the tax credit.

“Our ask on the Hill today and this week is a one-year, full-value extension of the production tax credit,” said Steve Lockard, president and CEO of TPI Composites, a company that builds wind turbine blades. “That’s the priority today, and tying it to the payroll tax bill is the immediate vehicle to get it through.”

“There’s an emergency around what we’re doing,” he added.

The production tax credit, which provides a 2.2 cent-per-kilowatt-hour benefit for wind power generators over their first 10 years of existence, has helped the industry surge forward in recent years. Although it still accounts for only 3.5 percent of total U.S. energy supply, wind power represents nearly 35 percent of all added capacity over the last four years, according to the American Wind Energy Association.


When Congress has failed to renew the credit — in 1999, 2001 and 2003 — the industry’s growth has largely stagnated. A similar plunge in growth is expected in 2013 if the tax credit is not extended.