Wind group urges Congress to extend tax credit
The pressure comes as lawmakers begin negotiations to extend the Social Security payroll tax holiday — a package supporters see as a potential vehicle for the production tax credit. Set to expire at the end of this year, the credit grants companies that produce electricity from wind, solar, geothermal and certain plants a 2.2-cent-per-kilowatt-hour subsidy for the first 10 years of the facility’s operation.
In a call with reporters today, American Wind Energy Association CEO Denise Bode said lawmakers are running out of time to extend the credit without damaging the industry.
“Our greatest fear is that this is delayed until later on in the year,” she said. “If that happens, we are very likely to lose tens of thousands of jobs.”
AWEA released a report on the industry’s fourth-quarter results to support its contention that the tax credit has been successful in building a growing sector of the economy. The industry installed a total of 6,810 megawatts last year — 31 percent more than the year before and a 17 percent increase to the nation’s total capacity.
Bode and AWEA chief economist Elizabeth Salerno argued that the industry would take a plunge if Congress did not extend the tax credit by the end of March. The group is calling for a four-year extension that Bode said would continue the growth trend and “allow us to finish the job.”
If the tax credit expires — or even if Congress extends it at the last minute — the effect would trickle down to the manufacturers that make the thousands of parts that go into a turbine, they argue. Terry Royer, president of Winergy Drive Systems Corp., compared it to going “against a cliff” as 2013 approaches.
“We’re looking for a swift extension now so we can properly plan our supply chain,” said Royer, whose company supplies turbine gearboxes and couplings. The uncertainty also affect planning and investments, he said.
The industry is putting its weight behind a bill from Reps. Dave Reichert (R-Wash.) and Earl Blumenauer (D-Ore.) that has 39 co-sponsors, including 13 Republicans. When asked today about GOP criticism that the tax credit was too expensive, Bode argued that it actually stimulates the economy.
“I believe that the real risk and the real problem is if you basically eliminate the on average $17 billion in private investment that has been leveraged from this,” she said.