Policy: Environment & Energy

Wind energy credit excluded from Senate Finance Committee proposal

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The Senate Finance Committee Chairman released a bipartisan proposal for extending energy tax incentives Tuesday, but there was one key omission -- the wind energy production tax credit.

The credit, which expired at the end of 2013 and also affects geothermal, biomass and other renewable sources, has become a hot political topic in recent years. It's one of the higher-profile energy provisions being considered, and committee Chairman Ron Wyden, D-Ore., who previously headed the Energy and Natural Resources Committee, has publicly backed it in the past.

Although it was not in Wyden's proposal, which touches on expiring or already expired provisions, committee spokesman Keith Chu told the Washington Examiner that the Oregon Democrat still supports the credit.

Rob Gramlich, senior vice president of public policy at the American Wind Energy Association, said he thinks the committee ultimately will vote to extend the credit.

"On the committee, again, we believe we have sufficient bipartisan support where if it came to a vote we think we would do just fine," Gramlich said.

Many insiders expect an amendment to extend the credit attached to the package, which Wyden has said he hopes will be the last extenders legislation before starting on comprehensive tax reform next year.

The exclusion, Gramlich said, likely reflects that "the committee is juggling a lot of items and a lot of members," a nod to some of the contentious debate surrounding the credit.

Fiscal conservatives, chiefly those from the Southeast, have said the 2.3-cent per kilowatt-hour incentive leaves too big a hole in federal revenue. A change to the credit when it was extended one year in 2013 put the cost at $12 billion through 10 years, according to the Congressional Budget Office.

Some electric utilities have argued the credit also creates a "negative pricing" scenario in which they pay customers to take their baseload power. Exelon Corp. is advancing that argument, saying that negative pricing affects its nuclear fleet, as those power plants can't alter electric output quickly.

But the credit has many supporters on both sides of the aisle, particularly among those from breezier states in the West and Midwest who are pushing for a long-term congressional commitment. The wind energy group says the credit leveraged $25 billion of private investment in 2012, but has noted that investment in new turbines wanes when the credit faces expiration.

"Like all businesses, the wind industry seeks certainty and predictability so that long-term project decisions and investments can be made," a bipartisan group of 24 senators supporting an extension of the credit wrote last month to Wyden and Sen. Orrin Hatch, R-Utah, the committee's top Republican. "Without that stability, we once again risk losing many of the jobs, infrastructure and investment that the wind industry has created."

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