Congress should, without delay, extend the federal wind energy production tax credit through the end of 2015.
We fear anything less will result next year in reduced wind energy investment and fewer wind energy projects at a key time of growth and promise for the industry.
Earlier this month, the House passed an extension of the tax credit (2.2 cents for every kilowatt-hour of electricity generated), but only through the end of 2014. Under this extension, any wind power project under construction before the end of this year is eligible for the credit when it begins to generate power, but no such guarantee exists for projects started next year.
In perhaps no other state is this discussion more important than it is in Iowa.
– Iowa ranks third in the nation in employment related to the wind energy industry.
– Iowa is first in the nation in terms of percentage of total generation of electricity from wind energy.
– In May 2013, Gov. Terry Branstad and officials of MidAmerican Energy Co. announced plans for the largest economic development investment in Iowa history: A $1.9 billion wind energy project involving the addition of 656 new wind turbines. In October 2014, MidAmerican announced it will install 67 more wind turbines in O’Brien County and Adams County at a cost of $280 million.
– In February 2014, plans were announced for Sabre Industries to build between 2,000 and 3,000 utility poles for Houston-based Clean Line Energy Partners at a cost of $150 million to $200 million. Contingent on necessary approval from utility regulators in impacted states, Clean Line will use the poles for a high-voltage transmission line through which electricity generated by wind power in Northwest Iowa, Northeast Nebraska, Southeast South Dakota and Southwest Minnesota will be delivered to metro Chicago and other eastern states by 2017.
In other words, wind is big in our state.
At a time when jobs, energy independence and producing clean, renewable fuels are near the top of this nation’s list of priorities, renewal of the wind energy production tax credit beyond 2014 is, in our view, money well spent for America, too.
We do not disagree with those who say the wind energy industry should stand on its own at some point, but this should happen gradually and fairly.
To this end, we embrace the position of Sen. Charles Grassley, R-Iowa, author of the tax credit, who said he is open to its phased elimination, but not to singling it out for complete elimination all at once.
“I know it won’t go on forever. It was never meant to, and it shouldn’t,” Grassley said recently on the U.S. Senate floor. “I’m happy to discuss a responsible, multi-year phaseout of the wind tax credit. In 2012, the wind energy industry was the only industry to put forward a phaseout plan.”
Any phaseout of the tax credit, Grassley said, should take place within the context of comprehensive tax reform in which all energy tax breaks are on the table. Let’s not forget, the oil, natural gas, coal and nuclear power industries get federal tax breaks, too,
“And it should be done responsibly over a few years to provide certainty and ensure a viable industry,” he said.
That, in our view, is a reasoned plan.
First, though, Congress should extend the wind tax credit through the end of next year to remove immediate uncertainty and prevent devastating consequences within the industry.