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United States

Only a small tax credit window

The US Congress left for its August recess without extending the federal $0.021/kWh production tax credit (PTC) for wind power generation, leaving the industry's leaders again warning policy makers that the ongoing indecision is threatening market growth. "The pipeline of investment for 2009 has been on hold for months, with escalating risks and costs for the industry, because of the uncertainty about the production tax credit," says Randy Swisher, who heads the American Wind Energy Association (AWEA).

The credit is set to expire at the end of this year and, despite strong support from both Democrats and Republicans for the incentive, numerous attempts to extend the PTC have run aground over disagreement over how to pay for it. "It's tremendously unfortunate and it's beyond my political understanding to grasp exactly what's going on. But I hope Congress sees the wisdom of doing the right thing and doing it sooner rather than later," says Bob Lukefahr, who heads BP Alternative Energy's North American operations. "A hiccup this year is going to set the industry back very substantially."

The wind industry has used the summer break to push hard for passage of an extension when Congress returns this month. It has attended both the Democratic National Convention in late August in Denver and the Republican National Convention in Minneapolis in early September, where the parties formally nominate their presidential candidates for the November 4 election. There is only a brief window to deal with legislative matters though, before the Senate and House of Representatives break again for the election campaign season. AWEA warns it could be tough to get the parties to work together in the final stages of a heated presidential campaign.

One bill that could come to the floor in September is the New Energy Reform Act of 2008, a compromise proposal from a bipartisan group of ten senators in an attempt to break the impasse over energy legislation. The plan would relax restrictions on offshore drilling in the southeast Atlantic Ocean and eastern Gulf of Mexico, repeal some tax breaks for the oil and gas industry and fund an extension of the PTC through 2012.

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