Darrell Proctor reports that the U.S. House of Representatives on November 2 proposed a tax bill that would phase out the wind energy production tax credit (PTC), and extend a tax credit for the nuclear power industry, add credits for geothermal and fuel cell programs, and end a tax credit for the purchase of electric vehicles.
Wind energy proponents decried the proposal, of course, noting it was just less than two years ago that Congress renewed the wind tax credit, which spurred investment in wind energy projects. “Despite comments to the contrary, this proposal reneges on the tax reform deal that was already agreed to, and would impose a retroactive tax hike on an entire industry,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA), in a statement Thursday. “The House proposal would pull the rug out from under 100,000 U.S. wind workers and 500 American factories, including some of the fastest growing jobs in the country. We expect members of the House and Senate to oppose any proposal that fails to honor that commitment, and we will fight hard to see that wind energy continues to work for America.”
While proponents and opponents of the proposal were vocal in their positions Thursday, the bill could quickly be changed. Kevin Brady, a Texas Republican and chairman of the House Ways and Means Committee, said he may rewrite the bill prior to a committee vote on November 6. And the Senate is expected to draft its own tax legislation. Tax credits for some wind and solar programs remain in the new bill, but the draft legislation would cut the current wind PTC by more than a third. However, the bill extends an estimated $6 billion tax credit for the nuclear power industry, a key provision cited by Southern Co. subsidiary Georgia Power earlier this year when it decided to continue construction of the Vogtle nuclear project in Georgia. The tax credit had a 2021 deadline, and the oft-delayed and much-troubled construction of two new AP1000 reactors at Vogtle likely would not make that deadline.
The bill’s tax credits for geothermal, small-scale wind projects, and development of fuel cells were resurrected after being left out of a 2015 budget and spending deal. Congressional analysts estimated the phase-out plan for the wind PTC, which also cuts the industry’s 2.3-cent-per-kWh tax credit to 1.5 cents, would eliminate more than $11 billion in benefits to the industry over the next 10 years. Congress in 2015 passed a law that said the wind PTC would begin phasing out in 2017, and expire in 2020. “The wind energy production tax credit is already being phased out under a compromise brokered in 2015,” Iowa GOP Sen. Chuck Grassley said in a statement. “It shouldn’t be re-opened. I’m working within the Senate Finance Committee to see that the commitment made to a multi-year phase-out remains intact.”
The wind energy PTC allows for a tax credit for each kilowatt hour generated. It was created by Congress to allow wind developers access to funds to invest in U.S. wind projects. In 2015, Congress passed a bipartisan five-year extension for the credit.