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Environment | Energy

Wind Power Tax Credit Faces Year-End Expiration

Some clean energy jobs could disappear from the Pacific Northwest next year. That’s a consequence of Congress’s failure to renew a wind tax credit that expires Monday.

Wind developers say the production tax credit is vital to the growing industry. But critics of the credit say taxpayers should not subsidize wind energy.

Turbine and Crane
A crane is ready to install three blades on
a wind turbine.

The tax credit works like this: Wind producers receive 2.2-cents for each kilowatt-hour of electricity they create. And without this subsidy, analysts predict wind construction will come to a halt.

Tom Vinson is with the American Wind Energy Association, an industry trade group. He says he hopes the production tax credit will be included in a broader financial package in 2013.

“It is important to keep the industry growing and keep the investment going and keep job creation,” Vinson said.

Vinson says wind energy development will slow down. That’s because Congress has created so much uncertainty by taking so long to decide whether to extend the credit. The association has outlined a plan to phase out the production tax credit in six years.

In Washington, project manager Aaron Pedigo helped get First Wind’s Palouse Wind farm up and running before the credit expired. Many wind developers rushed to complete projects before the Dec. 31 deadline.

“I think 2013, I’ve not really talked to anybody that’s, that’s told me they have something hard on the books for next year. And I think a lot of people are wondering if their jobs are going to be around for next year,” Pedigo said.

The credit has expired three times since Congress enacted it 20 years ago. In each case, it’s eventually been restarted.

Wind energy advocates say all other forms of energy get help from taxpayers. The difference is, those incentives are permanent — advocates don’t have to defend them to Congress every few years.

Peter Kelly is with the American Wind Energy Association, an industry trade group. He says wind project construction has dropped dramatically every year the credit has ended.

“To do without any incentive – in the face of all the many incentives for other forms of energy – the industry is just not at that point yet. Every year we’re more cost competitive, but we need to finish the job of basically creating a new industry,” Kelly said.

But critics say the credit is nothing more than a welfare subsidy for the wind industry. Benjamin Cole is with the advocacy group American Energy Alliance. It’s funded in part by the oil industry and has lobbied against the credit. Cole said wind energy needs to stand on its own two feet.

“The problem with the production tax credit and the lobby that comes to Congress every year is: they always want one more year. They want five more years. Can you extend it for 10 more years?” Cole said.

Trade groups say the industry will lose 37,000 jobs next year if the credit is not reinstated.

The Western Governors’ Association, which includes Idaho, Oregon and Washington governors, recently sent a letter to Congress asking to extend the production tax credit.

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