Romney calls for subsidy ‘phase out’; campaign says position unchanged on PTC expiration
The line appeared to some as if Romney was signing on to an idea that is gaining currency within the wind industry — and its supporters on Capitol Hill — as it faces a looming expiration of the prized production tax credit at the end of this year: to gradually reduce the PTC over several years, rather than letting it lapse this year.
“We will support nuclear and renewables, but phase out subsidies once an industry is on its feet,” Romney said during an economic policy speech in Ames.
Romney’s campaign made waves this summer when a spokesman said the former Massachusetts governor would like to see the credit lapse at the end of this year. A campaign aide told E&ENews PM today that position hasn’t changed.
“Gov. Romney said that subsidies in general should be phased out as industries mature, and that includes allowing the wind PTC to expire,” the aide said.
But some wind supporters saw a reason for optimism in Romney’s remarks.
Rep. Steve King (R-Iowa), one of his party’s most ardent supporters of extending the PTC beyond this year, said in a post on Twitter that Romney’s remarks today indicate that the credit “has a path to a soft landing.”
The fate of the PTC is likely to be decided when Congress reconvenes after the elections, along with a host of pending business legislators would like to complete before the end of the year. The Senate Finance Committee in August approved a broad tax package that included a one-year PTC extension, although the House Ways and Means Committee has yet to assemble a package of its own.
There is bipartisan support for an extension of the credit in both chambers, and industry lobbyists have remained cautiously optimistic about their chances in a lame-duck session.
Frank Maisano, an energy expert with Washington lobbying firm Bracewell & Giuliani, said Romney’s comments were a “reflection of the realities Congress has laid out” and the likelihood that lawmakers would not allow the credit to expire this year.
Wind industry supporters say letting the credit lapse would mean thousands of lost jobs and a dramatic reduction in the development of new wind projects next year. Winning an immediate extension to the credit remains the industry’s top priority, although more detailed discussion of a phaseout is expected in the context of comprehensive tax reform.
“We’ve always said we won’t need a tax credit forever. We’re committed as an industry to looking at options for the future of the production tax credit next year during corporate tax reform, when all energy incentives will be on the table,” said Peter Kelley, a spokesman for the American Wind Energy Association. “Right now, however, we urgently need an extension to avoid the loss of 37,000 jobs right around Inauguration Day. Let us finish the job of creating a new U.S. manufacturing sector.”
Romney’s opposition to the tax credit has become political fodder for Democrats in states such as Iowa, which last year generated 18.8 percent of its electricity from wind, and Colorado, which relied on wind for 9.2 percent of its electricity. Both remain tossups in the presidential race.