Wind and ethanol groups lament failure of Stabenow’s tax break plan

Source: Hannah Northey • E&E • Posted: Wednesday, March 14, 2012

Renewable energy supporters said the Senate’s rejection yesterday of a Democratic proposal to extend a host of expiring tax breaks for the wind, solar and bioenergy industries reflects the new “buzz saw partisan politics” currently looming over Congress.

The Senate voted mostly along party lines to reject Sen. Debbie Stabenow’s (D-Mich.) amendment to the $109 billion transportation reauthorization bill to extend more than a dozen energy tax credits, including a production credit for wind and solar power that has backing from several Republicans and renewables groups.

Stabenow’s amendment would have continued the production credit through 2013, as well as a Treasury Department renewable-power grant program known as 1603. The language also would have extended tax incentives for biodiesel, cellulosic ethanol infrastructure, electric vehicles and related alternative fuel infrastructure, and energy-efficient homes and buildings.

Although the measure needed 60 votes to pass, it garnered 49 Democratic yeas. Forty-five Republicans and four Democrats voted against it, including Democratic Sens. Joe Manchin of West Virginia, Jim Webb and Mark Warner of Virginia, and Claire McCaskill of Missouri.

“It’s unfortunately indicative of how divisive a previously popular and bipartisan proposal has become,” said Joshua Freed, vice president of Third Way’s clean energy program. Freed pointed out that wind projects populate both Republican-led states like Iowa and Arizona and Democratic states like California

But Freed said “more swings at the bat will be taken,” and that Stabenow’s language was part of a more far-reaching effort on behalf of the wind and solar industries to extend the tax breaks. Freed said many observers expect the effort to continue into the lame-duck session but added that it is “a real roll of the dice to count on anything happening in December in 2012 after an election, whose outcome no one knows.”

Wind and ethanol groups lamented the failure of the provision yesterday as a blow to an issue that has received bipartisan support in Congress.

“We are disappointed that tens of thousands of American jobs are being put in peril by partisan gridlock in Washington,” American Wind Energy Association CEO Denise Bode said in a statement. “Despite the partisan vote on these broader energy amendments, the fact remains that the wind Production Tax Credit (PTC) enjoys bipartisan support in the House and Senate.”

Bode warned that inaction on tax credits could kill 37,000 jobs in the United States, shutter plants and cancel billions of dollars in private investment.

Advanced Ethanol Council Executive Director Brooke Coleman said Congress missed an opportunity to “put to bed the pressing need to extend expiring tax incentives for cellulosic biofuels and other sources of domestically produced clean energy.”

Freed said the inclusion of energy tax incentives as sweeteners on tougher votes highlights the need for long-term comprehensive reform of the energy tax incentives. Placing such crucial funding for the wind and solar industries into the snare of politics, he said, creates uncertainty for wind and solar developers seeking financial certainty.

Tom Buis, CEO of Growth Energy, said in a statement that the defeat of Stabenow’s amendment is akin to “losing a battle but not a war” and that bolstering ethanol production can help lower fuel prices for all Americans.

Lobbying preceding yesterday’s vote intensified as groups like the Renewable Fuels Association touted the language’s benefit, while the conservative Heritage Action for America blasted the proposal as a continuation of what it views as market-distorting energy subsidies (Greenwire, March 8).

The Heritage group bemoaned the Senate’s rejection of Sen. Jim DeMint’s (R-S.C.) amendment by a vote of 26-72 that would have scaled back some of the same energy tax credits.

“The rejection of the DeMint amendment was a disappointment, however, as it was the only amendment that would have corrected our current resource market to allow the best technologies to succeed and innovation to thrive,” the group said in a statement.