The new proposal by Senate Finance Chairman Ron Wyden (D-OR) to extend dozens of tax breaks doesn’t include the credit for wind energy — but it could by the end of tomorrow, according to Wyden’s office.
Over time, a collection of about 55 tax breaks has built up, applying to a range of industries and activities across the economy. Among them is the production tax credit (PTC) for wind, hydropower and geothermal energy, which is aimed at encouraging the development of those renewable sources.
All 55 expired at the end of 2013 — an event that happens every year or every few years, after which Congress sets out to renew the package for another year or two. This year, Wyden’s initial proposal managed to get the number of credits being extended down to 42, including credits aimed at incentivizing plug-in electric vehicle purchases, construction of alternative fuel infrastructure, cellulosic biofuel production, renewable diesel production, and more energy-efficient homes. However, Wyden’s proposal did not include the PTC for wind.
Keith Chu, Wyden’s aide, told the Des Moines Register that the initial 42 extenders represent what Wyden could agree on with Sen. Orrin Hatch (R-UT), the Senate Finance Committee’s top Republican. “Wyden supports clean energy and extending the PTC,” Chu said, adding that he expects the wind PTC to be brought up when the proposal gets its scheduled debate on Thursday.
In fact, Sen. Chuck Grassley (R-IA), a supporter of the wind energy credit, has already said he would offer up an amendment to restore it during debate. “There’s a significant amount of bipartisan, bicameral support for the wind tax provisions,” Grassley pointed out.
Sen. Mark Udall (D-CO) also chimed in, saying, “I will keep fighting in Congress to ensure we keep the wind at the backs of wind-energy companies in Colorado and across our nation.”
For the wind energy industry specifically, Congress’ habit of letting the PTC expire and then retroactively renewing it has lead to a boom-and-bust cycle. Wind installations spike to take advantage of the credit before it expires, and then collapse afterwards in the uncertainty of whether Congress will resuscitate it. The PTC was first passed in 1992, and since then it has been renewed a total of nine times.
According to both Wyden and Hatch, the decision to pair down the extenders was driven by a desire to clean up and rationalize the United States tax code. “This pared-back bill demonstrates to the American people that Congress can and will make the tough decisions needed to help clean up our broken tax code,” Hatch said in a statement.
“I am determined this will be the last extenders bill on my watch,” Wyden added. “It’s high time we focus on creating a new, 21st-century tax code, because the status quo is unacceptable.”
Wyden and Hatch’s current proposal extends the 42 credits for a total of two years, and Wyden said he hopes to use debate over the bill as a springboard to discussing more permanent changes that will eliminate the cycle of temporary extensions.