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Production tax credit positioning

The US Senate overwhelmingly passed sweeping energy legislation in late June containing a three-year extension to the wind power production tax credit (PTC), but hard bargaining looms with House representatives whose own bill, approved in April, contains no incentives to drive the wind power market.

The two bodies must now try to reconcile their energy bills into a single piece of compromise legislation that President George Bush can sign into law. Bush is urging the so-called conference committee that will conduct the negotiations to finish their work before the August recess. "It will be an important conference committee and it will be a numbers game," says the American Wind Energy Association's Randy Swisher. "There are a lot of positives in terms of getting legislation this year, so I am optimistic. But it is not a done deal yet. Don't take anything to the bank today."

There are significant and contentious differences that must be resolved. The Senate legislation says nothing about drilling in the Arctic National Wildlife Refuge in Alaska, although that is a top priority of the Bush administration and House Republicans. And it provides no aid to larger oil companies and refiners who want protection against lawsuits resulting from the contamination of drinking water by the gasoline additive MTBE. House leaders have insisted an MTBE waiver be part of energy legislation. Cost is another key issue. The Senate bill would cost $16 billion over ten years, compared to about $8 billion for the House bill. The White House wanted a $6.7 billion price tag.

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