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Challenging big oil for tax credit

A renewed attempt by the US House of Representatives to extend wind's $0.02/kWh production tax credit (PTC) for three years and pay for it by repealing tax breaks to big oil is unlikely to find support in the Senate and White House, but the country's wind industry is hoping it will be the starting point towards a compromise that works for everyone.

Similar legislation last year failed in the face of veto threats from President George W. Bush, who has made it clear that any attempt to raise taxes for the oil industry is a non-starter. Since the bill was introduced in mid-February, a number of senators have also expressed doubt as to its chances for success in that chamber.

"The House will pass the bill and the question is how can we handle it in the Senate? What we need to do is get to the step where we have what they call a House-Senate conference committee where they hammer out the differences. This takes us toward that step, which is good," says the American Wind Energy Association's Jaime Steve.

Steve says the leadership in the both the House and Senate is committed to finalising a multi-year extension of the PTC before it expires at the end of this year, but industry players acknowledge last year's record-breaking growth is making things more difficult. "The thing that concerns me right now is that when you talk about 5200 MW, that's very significant compared to what we have historically done," says Acciona Energy's Peter Duprey, referring to the new wind capacity installed through 2007.

"The way the legislation has to work is if you are going to give a tax credit here you have to take it away from somewhere else over there. Because the number is so much larger, there is a lot of push back from whomever you are going to take it from. That's why I think passing the PTC is going to become more and more difficult."

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