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United States

TAX CREDITS SET TO LIVE AND FIGHT ANOTHER DAY

In a major victory for American wind power, its beleaguered production tax credit seems to have survived in Washington DC. Repeal of the financial incentive for each kilowatt hour of wind energy sold to the grid would have virtually destroyed the US wind market, many believe.

As part of the US budget reconciliation bill, the House of Representatives had voted to repeal the incentive, signed into law by former President Bush as part of the Energy Policy Act of 1992 and intended to make wind competitive with conventional generating technologies. But the US Senate was against the move to repeal the one-and-a-half-cent a kilowatt hour credit, forcing the issue into the US Congress's conference committee that irons out differences between bills passed by the two houses.

In mid November the conferees decided to exclude repeal of the credit, says Randy Swisher of the American Wind Energy Association. Although President Bill Clinton has promised to veto the final budget bill, because of issues such as welfare and social services, Swisher says the support for the credit that emerged has been so strong, the measure is most likely to survive. "I think the odds are, given the support they're not going to repeal it," he said on November 22. More than 100 members of the US Congress pledged to oppose repeal of the credit.

Once vetoed, the budget bill will have to be put back together again in a form that is likely to be approved. That will probably happen by about Christmas. And Swisher says that given the show of support, the credit seems as if it will survive. Although he cautions against wind industry people from overly withdrawing much-needed political pressure because of the victory, he says happily, "This was the big fight, and I think we can say it's been fought and won!"

In other Washington news, next fiscal year's wind funding will be down one-third from this year's, but it could have been far worse. Both houses of the US Congress on October 31 agreed on a wind research and development budget of $32.5 million, down from the $49 million in fiscal year 1995. The House of Representatives had wanted a level of just $20 million and the US Senate some $42 million. There will be significant cuts in US Department of Energy programmes, most likely major joint venture requests for proposals developed through the Climate Change Action Plan.

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