No imminent extension to production tax credit as energy bill dies

There will be no extension to the federal production tax credit (PTC) for wind power passed this year. House and Senate conference leaders, following their return to Washington DC after the mid-term elections, decided that an agreement over a comprehensive energy policy would not be possible before the Christmas holiday break, effectively killing the bill. Among the issues that remain unresolved are the PTC, which has bi-partisan support, and a national renewables portfolio standard (RPS), which was favoured by the Democrat-controlled Senate, but largely opposed by House Republicans. The PTC, on which most current wind development is dependent, expires at the end of next year. Projects not built by then miss out on an incentive worth $0.018/kWh. An extension until December 31, 2006, had been part of the energy bill -- and the American Wind Energy Association's Christine Real de Azua says the prospects for it being retained in a new energy bill are good. The tax credit has strong support among Democrats and Republicans in both the Senate and House and "there's no reason that won't be picked up and included in the energy bill as it goes forward." It can also be included in separate tax-related legislation, although it is too early to say what might transpire. The prospects for an RPS, however, are not good in the new Congress, says Real de Azua. The Republican leadership has voiced its strong opposition to the provision and it remains to be seen if the Senate, with Democrats no longer in the majority following the elections, retain an RPS in the bill.