Wind energy has made tremendous strides in this nation in recent years, including here in the Pacific Northwest.
Power harnessed from the wind is a key ingredient in the ability of the state’s largest utilities to beef up the amount of green energy in their resource portfolios. All 17 of the public and private utilities required under Initiative 937 to secure 3 percent of their energy from renewable resources by the end of the year owe their success in large part to investments in wind power.
But it’s still an industry in its infancy, not mature enough to eliminate a federal tax credit that cuts the costs of wind projects by as much as one-third.
The loss of the tax credit, which amounts to as much as $5 billion per year, could cost some 37,000 wind energy jobs, which is about half the workforce employed in the enterprise of harvesting wind for power.
The wind energy tax break is just one of many pieces of the federal budget in play as the Obama administration and Congress wrangle over a plan to keep the nation from falling off the fiscal cliff.
Unlike tax subsidies for the oil industry, it should be removed from the table.
Just last August, the United States wind industry pushed past 50,000 megawatts of total capacity. Under optimal wind conditions, that’s enough electricity to power 13 million homes.
This year alone, the wind industry has added more than 4,700 megawatts of generation, and another 8.430 megawatts of wind turbines under construction across the country.
The federal Production Tax Credit lowers tax payments for wind generators by 2.2 cents per kilowatt-hour for the electricity produced in the first decade of a wind project. The tax has been in place continuously since 2005, and has played a major role in expansion of this key renewable resource.
Despite the genuine need to reduce the federal deficit, the tax credit for wind continues to have strong bipartisan support, a telling reminder that the wind blows in red states and blue states alike.
A proposal to extend the tax credit for projects that commence construction in 2013 has passed the Senate Finance Committee with bipartisan support. In the House, a bill has been introduced to extend the Production Tax Credit through 2016. Prime sponsors in the House include Rep. Dave Reichert, R-Wash., and Rep. Earl Blumenauer, D-Ore.
Congressional candidates friendly to wind power fared well in the recent election, according to the American Wind Energy Association. Nearly 90 percent of the Senate candidates backed by the wind industry won their races. Some 88 percent of the House candidates who garnered support from WindPAC will be seated in the next Congress.
The tax credit is an economic incentive that helps generate some $15 billion in private investment in wind farms annually.
This nation still lacks a coherent energy policy that weans Americans off depleted supplies of climate-changing fossil fuels. Instead of championing green energy, the presidential candidates fought over votes in coal country by downplaying that industry’s economic and environmental problems.
To his credit, President Barack Obama has voiced support for the wind energy tax credit extension, and called for an end to $4 billion in annual tax breaks for the oil industry. Congress should follow his lead.