Boom-and-bust cycles like the ones the wind power industry has endured multiple times since the PTC was first allowed to expire 13 years ago are extremely disruptive to new, growing industries. Instead of making strategic business plans and executing them, companies are forced to lay off skilled employees for indefinite periods and then recall them later or hire and train new workers–a colossal waste of money and time and a wrenching economic hardship for workers and their families, particularly at a time when the overall economy is still struggling.
Wind power also shows what can be done with stable policy. In the past five years of bipartisan policy stability on the PTC, American wind power has:
Brought in as much as $20 billion annually in private investment to the U.S.
Created one of the largest providers of new American electric generation with 35% of all new power capacity, right behind natural gas.
Driven technology advances that have made wind more affordable than ever. A typical wind turbine now generates 30% more electricity, while still driving down costs.
Created nearly 500 new American manufacturing facilities and employed 75,000 overall, including 30,000 in the manufacturing sector, from coast to coast.
Produced enough electricity last year to power the entire state of Michigan.
Wind power is affordable and helps hold down the price of other fuels, which means that it helps stabilize consumers’ electric rates. Utilities like wind because it acts as a hedge against future volatility of natural gas prices. And it offers a long-term contract – utilities can lock in a price for 20 or 25 years, as a fixed-rate home mortgage does versus adjustable rates.
Southern Company’s first contract for wind power “is expected to be lower than the cost the company would incur to produce that energy from its own resource, with the resulting energy savings flowing directly to the Company’s customers,” according to the Alabama Public Service Commission. And, electric rates increased three times more in the 40 states with the least wind power between 2005 and 2010 than in the top 10 states for wind generation.
A House bill seeking to extend the PTC has 105 cosponsors, including 24 Republicans, while a similar Senate bill is cosponsored by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S. A PTC extension has been endorsed by a number of newspapers across the country, including the Houston Chronicle, The New York Times, the Denver Post, the Daily Oklahoman, and the Toledo Blade.
Congress should act now to extend the PTC and avoid further harm to one of the country’s most promising new energy options. Let wind finish the job of building a new manufacturing industry and making the most of an abundant, affordable, clean, domestic resource.
This article was submitted to the National Journal’s Energy Experts blog in response to a discussion question on changes Congress should consider in the tax code relating to energy policy.
By Denise Bode, AWEA CEO, www.awea.org/blog/