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Production Tax Credit renewal chances fading fast

Politicians on Capitol Hill were still struggling to complete a tax bill in early August as the chances of wind power getting another Production Tax Credit (PTC) this summer faded fast. Legislation had ground to a halt in a dispute over cuts versus a balanced budget, with Clinton threatening to veto any bill that included the heavy tax reductions advocated by Republican law makers. A provision to reinstate the tax credit for wind, as well as for electricity from chicken manure was included in the version of the tax bill under debate in the House of Representatives, but not the Senate's version. To become law this session, the credit will have to be part of the bill agreed upon in conference, when negotiators from both houses must iron out the differences between their versions -- and then survive a possible veto by Clinton. The House provision would reinstate the credit, currently worth some $0.017/kWh for the first decade of a project's operating life, until mid-2004. It would also backdate the tax break to July 1. The importance of the tax credit, which ended on June 30, can be gauged from the fact that its expiration prompted the largest rush of development in the history of the US wind industry. If tax legislation is not completed this session, the wind industry must wait until the next congressional session, which starts October 1. The next session is also an "election year," a notoriously quirky time because politics becomes so dominated by presidential and congressional campaigning.

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