September 17, 2015 at 11:17 am ET
Lobbying Blitz Begins On Wind Tax Credit
Competing energy advocates are ramping up a messaging war over one of the biggest and oldest tax credits for renewable energy — wind. The lobbying blitz is aimed at a package of expiring tax provisions that Congress is likely to renew by the end of the year.
One side — traditional energy advocates and conservative groups — wants to kill the renewable electricity production tax credit, or PTC. The other side — the renewables industry and environmentalists — wants the longest extension possible.
The end result is likely to mirror what happened at the end of 2014, a weeks-long retroactive extension of the tax credit through the remainder of that year to allow tax filers to claim the credit. If the wind tax credit is extended again, allowing it to be credited to the tax-year 2015, it would mark the tenth time since 1992 that the PTC has been revived.
Opponents are backed by groups like Americans for Prosperity, the American Energy Alliance, the Club for Growth, and Heritage Action. The coalition sent a letter to House Ways and Means Committee Chair Paul Ryan (R–Wis.) on Wednesday expressing their opposition to another extension. Though this isn’t the first time right-leaning groups have rallied together to oppose the tax credit, the letter is unique in that it focuses exclusively on groups with legislative scorecards, according to AEA’s communications director Chris Warren.
Warren thinks the wind industry needs to stand on its own and shouldn’t be propped up by government subsidies. The letter serves as a warning to House members that if a PTC extension gets included in a package of tax extenders, it’s going to count against them. These groups’ scorecards, he said, carry “a lot of weight” in elections.
The American Wind Energy Association, on the other hand, thinks PTC opponents are losing ground. Peter Kelley, vice president of public affairs at the trade group, pointed to another letter, signed by over 2,000 companies last week, which calls on Congress to pass the entire package of tax extenders swiftly. Opponents “had far larger numbers on their side before, but nothing approaching the 2,000 companies that were just writing in support of the tax extenders bill,” he said.
The PTC is not without its Republican supporters in Congress. GOP Sen. Chuck Grassley (Iowa), for example, is considered the father (or perhaps at this point, the grandfather) of the tax credit.
“Eighty percent of wind farms are in House districts controlled by Republicans,” Kelley continued, “They know that… A vote for the PTC is a vote for rural economic development in all those red districts.”
Republicans who are fence-sitting on the PTC could be swayed to oppose the tax credit if it is seen as enabling the White House to carry out its power plant emissions rule. The Clean Power Plan, unveiled in August, relies heavily on wind power to replace fossil fuel fired power plants.
“Folks on Capitol Hill supporting the PTC are helping the administration push the Clean Power Plan across the finish line,” Warren said.
Though most conservative lawmakers fiercely oppose the Clean Power Plan, their efforts to squander the rule have thus far been fruitless. But if “the House Republicans really do rally around the cause that the PTC is tied to the power plant rule…it may be the only legislative accomplishment to hinder implantation of the Clean Power Plan,” Warren said.
The House’s tax extenders package does not include the credit as of yet. Warren does not think House tax writers want to extend the PTC because “moving these extenders at one- or two-year increments is not good tax policy.” Ryan is committed to broader tax reform efforts. “I haven’t seen any signals that they’re going to [extend the PTC],” he said.
Kelley, on the other hand, is counting on lawmakers from big wind states to step up to the plate. “All of the members of Congress for whom wind has become a major cash crop back home, I think will be there when we need them,” he said.
Kelley can count on a handful of Republicans like Rep. Tom Cole to support wind energy’s cause. Speaking at an event dedicating a 150-megawatt wind power project in his home state of Oklahoma earlier this month, Cole talked about the economic benefits of the PTC.
“It’s not unusual for us to incentivize economic development through the tax code. If you’re traditionally in the oil and gas industry in Oklahoma, you’re pretty happy to have the completion allowance and intangible drilling cost deductions,” Cole said. “Those things have been important not only in keeping domestic energy viable, but absent those, you wouldn’t have had the investments in fracking and horizontal drilling, things that literally have revolutionized energy production. The same thing is true here.”
According to Wind Vision, a Department of Energy report released in early 2015, wind could supply 10 percent of the nation’s electricity demand by 2020, 20 percent by 2030, and 35 percent by 2050 – but only if the policy governing it is stable.
At this point, the biggest federal policy supporting the wind industry seems anything but.