Republican governors pressure home-state delegations on wind credit
The wind production tax credit is one of the hot-button energy issues for the lame-duck session of Congress. Scheduled to expire Dec. 31, it gives wind companies a tax credit of 2.2 cents for every kilowatt-hour they produce.
Republicans from states with a heavy wind presence, such as Iowa, generally champion the incentive and want to see it renewed.
But a handful of Republicans from Midwestern states oppose the credit on fiscal grounds, arguing it’s something the deficit-strapped government can no longer afford. That bloc of opposition could prevent an extension of the incentive from clearing the GOP-led House.
“We’re going to have to bridge that through the governors working with their respective delegations because I think they’re going to have more influence than I would have with them,” Sen. Chuck Grassley (R-Iowa) said at a Tuesday press conference.
GOP opponents of the credit in both the House and the Senate note a one-year extension could cost about $5 billion. They say Congress should refuse to extend it in a deal to avoid the “fiscal cliff,” a series of deep automatic spending cuts and income tax increases set to take effect Jan. 1.
Energy policy group American Energy Alliance, which opposes the credit, has reached out fiscal conservatives and lawmakers in states without a strong wind presence. The group’s anti-subsidy message has resonated with Republicans in the Southeast, and seems to have won over a small group of lawmakers who come from states where the wind credit is popular, including Kansas.
“You point to courageous souls like [Kansas Republican] congressman [Mike] Pompeo, for example,” American Energy Alliance President Thomas Pyle told The Hill. “Hopefully you have others join him. But I am in no way dismissing the power of shoveling pork into your home state or home district.”
The American Wind Energy Association (AWEA) says axing the credit would run counter to those lawmakers’ interests and notes that 81 percent of wind installations are in red districts. The group says ending the credit would cost the nation 37,000 jobs.
Republican Govs. Sam Brownback of Kansas and Terry Branstad of Iowa have been at the forefront of efforts to secure GOP support for the wind credit. They are leading members of the Governors’ Wind Energy Coalition, which includes both Democratic and Republican state executives.
“Everybody wants to deal with the financial problems we have in this country,” Brownback said Tuesday. “It’s just that I think there’s a more prudent ground to go here than just to end this [credit] that’s been a key thing to us solving our fiscal problems in this country. … This helps grow the economy.”
Pompeo, a congressman from Brownback’s state, has led the House charge against the credit. He spearheaded a September letter to House Speaker John Boehner (R-Ohio) asking him to end it.
“Today, when the U.S. is more than $15 trillion in debt and borrowing $0.40 of every dollar it spends, we cannot afford to borrow money to subsidize the operations of a politically preferred technology,” the letter said.
GOP lawmakers in Kansas, Michigan and Pennsylvania all signed Pompeo’s letter, even though their Republican governors back home support the credit.
Other GOP signatories came from states with Democratic governors — such as Illinois, Kentucky, Minnesota and Colorado — who also back the incentive.
Grassley, the governors and AWEA say they want to eventually phase out the incentive. But Grassley said abruptly ending it this year would be detrimental to an industry on the precipice of self-sufficiency.
“I think it’s something that’s been tossed around within the industry as well,” Grassley said. “We have a 20-year investment in this. It would be terrible to throw away that 20-year investment if we can make it a mature industry.”