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Fri December 7, 2012
Wyoming law makers want to phase out the Wind Production Tax Credit
Wyoming Republicans in Washington are advocating for phasing out the Wind Production Tax Credit, which has helped give the state a robust energy portfolio. Matt Laslo reports on the future of the tax credit in the near and long term.
MATT LASLO: It’s no secret Wyoming’s three lawmakers have had their careers propped up by the oil and gas industry. It’s either been their top donor, as is the case with Congresswoman Cynthia Lummis, or their second biggest donor, as is the case with the state’s two senators. But that doesn’t mean the delegation isn’t proud of the state’s renewable forms of energy. Senator John Barrasso says he’s glad the state is expanding its portfolio.
BARRASSO: We have all the renewables. We have world class wind, so there’s been a lot of efforts on wind energy.
LASLO: Even though they say they support the state’s wind industry, Wyoming lawmakers are calling for the end of a tax credit that incentivizes the production of energy from wind. Barrasso says that tax credit is masking the real cost of wind energy. He says it’s time to take off the mask.
BARRASSO: You know when the president talks about making wanting to make renewable energy the cheapest form of energy, he’s not doing it by actually lowering the cost of renewable energy. He’s doing it by raising the cost, through the EPA and other regulations, on some of the more affordable forms of energy.
LASLO: To be clear, the delegation has been supportive of oil and gas subsidies. But Congresswoman Lummis says there’s no comparison.
LUMMIS: They’re mixing apples and oranges.
LASLO: Lummis says it’s unique that wind producers receive a credit of two point two cents per every kilowatt hour-hour they send to the power grid.
LUMMIS: If you can show me an oil and gas credit that oil and gas gets that is the equivalent of the wind energy credit I would agree with them, but I can’t find a credit.
Lummis says oil and gas producers are merely working on a level playing field with other industries.
LUMMIS: Deductions that are available to oil and gas businesses and candy manufactures and tinker toy makers – that’s comparing apples to apples. I’m all about treating people the same under the tax code, but I don’t see oil and gas getting a production credit. If I’m wrong I’m willing to stand corrected.
LASLO: Environmental groups see things quite differently though. Courtney Abrams is a clean energy advocate for Environment America.
ABRAMS: The oil and gas industry has received subsidies from the government for decades, and the treatment has been quite different between oil and gas subsides and renewable energy industries, in that the oil and gas get permanent subsidies whereas the renewables have to fight every year to get tax credits renewed.
LASLO: Abrams argues the wind industry in Wyoming and elsewhere would take a massive hit if lawmakers can’t work out a way to renew the wind tax credit – called the PTC – by January.
ABRAMS: In past years when Congress has allowed the PTC to expire wind installations annually have dropped between 73% and 93%, so we could see wind projects that are planned to be built not being built at all without the certainty from Congress.
LASLO: That would ripple through the industry, potentially costing thousands of people their jobs across the U.S. Some in the wind industry support phasing the tax credit out over a long period of time, possibly in five years or so. Ed Burnett, a union president for a Pennsylvania chapter of the United Steel Workers, warns against moving too fast. He says even just extending the tax credit temporarily would have a negative impact on the industry.
BURNETT: I would say it would be pretty devastating to the wind industry with only a one year extension.
LASLO: Burnett says his plant is looking to upgrade its facility so they can manufacture a larger windmill blade – it could take a year just to overhaul the plant.
BURNETT: A one year extension really is pretty much like someone telling you, ‘I’m going to count to three.’ And you tell them, ‘Go ahead and count.’ And the first thing they say is ‘Three.’ Well, you’re done before you started.
LASLO: Wyoming Republicans aren’t moved by those arguments. Lummis says she supports a “rapid phase-out” of the credit that has transformed the U.S. wind industry.
LUMMIS: It’s time for it to go away. It’s time for wind energy to stand on its own two feet.
LASLO: Some Republicans want the tax credit ended as a part of negotiations to cut the federal debt. Currently the debate is focusing on personal income tax rates. Once the two sides answer that question they’ll look for savings in other parts of the budget, which is why wind producers are so worried.
For Wyoming Public Radio, I’m Matt Laslo in Washington.