United States

United States

New PTC and ITC proposals put forward

UNITED STATES: Key tax incentives for wind energy in the US would remain in place until 2017 under a draft tax reform plan floated Wednesday by the chair of the Senate's tax-writing committee.

Senator Max Baucus, a Democrat from Montana, issued a discussion draft that would see the $0.023/kWh production tax credit (PTC) and 30% investment tax credit (ITC) continue through the end of 2016.

At that point, all existing energy tax breaks would be consolidated into two incentives for the production of cleaner electricity and fuel.

The new clean electricity credit would be awarded to facilities that are at least 25% cleaner than the national average, as measured by the Environmental Protection Agency. That credit would phase out over four years once the greenhouse gas intensity of the US electricity generation declines to the point where it is 25% cleaner than 2013.

Baucus said: "Our current set of energy tax incentives is overly complex and picks winners and losers with no clear policy rationale. We need a system of energy incentives that is more predictable, rational and technology-neutral."

Rob Gramlich, senior president of policy for the American Wind Energy Association (AWEA) called the proposal a sound policy option that would "provide domestic energy producers with stability for the years to come."

The Baucus plan is an early step in a much broader effort to revise the US tax code, but it does lay the groundwork for discussion on how the US will support wind energy going forward.

Representative Dave Camp of Michigan, the Republican chairman of the House Ways and Means Committee, has yet to unveil his ideas for energy tax reform.

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