Governors' Wind Energy Coalition

An extension of US energy-related tax credits, including the production tax credit for wind power, will not be included in a congressional deal to extend a payroll tax cut that could be released as soon as Wednesday evening, a Republican lawmaker involved in negotiations said.

The PTC and other energy tax credit extensions “never were going to be in it,” said House of Representatives Energy and Commerce Chairman Fred Upton, Republican-Michigan, in a interview.

Upton, who sits on the committee negotiating a payroll tax extension deal, said he hopes an agreement will be finalized later Wednesday.

His Democratic counterpart on the Energy and Commerce Committee, Representative Henry Waxman, of California, also said he did not believe energy tax credits part of the agreement.

The 2.2-cents/kWh PTC is the primary federal subsidy for wind energy production and expires at the end of 2012.

But wind industry officials have said the long lead times necessary for wind farm development mean that a failure to extend the tax credit in the next month or two will halt development for next year. Wind officials have repeatedly said the payroll tax extension represented the best opportunity to extend the PTC without causing a break in the development pipeline.

Industry groups had lobbied for a range of other energy-related tax subsidies to be included in the payroll tax bill, including the $1/gal biodiesel blending credit and the 1603 grant program for renewable energy projects, both of which expired at the end of 2011, although the PTC was seen as most likely to be included in a bill.