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United States

Tax credit clears first hurdle

The US House of Representatives has approved a wide ranging energy package that includes a five year extension of the Production Tax Credit (PTC) for wind energy. The credit, worth $0.017/kWh for the first ten years of a project's life, is due to expire at the end of this year. And while the House energy bill is a significant step, says Christine Real de Azua of the American Wind Energy Association (AWEA), the legislation does not do enough to boost the role of wind power in solving the country's energy supply problems.

"There's disappointment there wasn't more," says Real de Azua. AWEA has also been lobbying for a 30% investment tax credit for small turbines and language in the bill to ensure non-discriminatory access to the transmission grid for variable sources of energy like wind power. The controversial 511-page energy package, designed to boost domestic energy production, includes $33.5 billion in tax breaks and other incentives, most aimed at increasing oil and gas exploration, developing new coal technologies and promoting nuclear. "It's not going to level the playing field," says Real de Azua. "Everybody is getting subsidies and some of those are getting new and expanded subsidies. For wind it's just an extension of what is already in place."

Lobbying attention now shifts to the US Senate, which is expected to take up its own energy legislation in the fall. There's a "strong likelihood" the Senate bill will contain not only a five year PTC extension, says Real de Azua, but also a small turbine credit and transmission language. Once the Senate bill is passed, negotiations begin on reconciling it with the House legislation. Real de Azua predicts the Democrats, who control the Senate and who believe Congress has already overspent on tax measures, will be looking to trim the cost of the final package. Even with broad political support for the PTC extension, she says, there's no guarantee it will survive the jockeying intact.

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