In 2008, President George W. Bush’s Department of Energy published a report showing how the United States could generate 20 percent of its electricity from wind power by 2030. In order to help meet that goal, Bush extended a federal tax credit for the wind industry, the Production Tax Credit. The PTC has been a successful and crucial tax deduction for the wind industry and enjoys wide bipartisan support. However, unlike permanent federal incentives available to other energy resources, Congress must renew the PTC periodically and has thus far failed to do so this year.
Wind energy emits no air or water pollution, requires no fuel, uses virtually no water and creates no hazardous or radioactive waste. Perhaps that’s why a vast majority of Americans support the development and use of wind energy. A new poll from the American Wind Energy Association shows that 73 percent of registered voters support continuing the PTC. That support is broadly bipartisan, with 63 percent of Republicans and 74 percent of independents supporting a lower tax rate for wind power.
The PTC is a successful investment that spurs economic development by reducing taxes. A 2012 study completed by NextEra Energy Resources shows that a one-year extension of the PTC actually results in a net benefit of about $768 million based on local, state and federal tax receipts.
The PTC spurs economic development by lowering wind energy contract prices. Southwestern Electric Power Company, a utility with a portion of its service territory here in Louisiana, currently purchases 469 megawatts of wind energy from Kansas, Oklahoma and Texas. Other utility companies in the South also are purchasing wind energy, frequently citing the low price of wind energy as the deciding factor.
Increased demand for wind power has expanded domestic manufacturing jobs. The majority of the dollar value of a wind farm is manufactured in the U.S. — with some of those components manufactured here in Louisiana. Blade Dynamics in New Orleans manufactures fiberglass blades for the domestic and international wind industry. Gulf Island Fabrication in Houma will be building foundations similar to offshore oil and gas rigs for a wind farm offshore of Rhode Island. These are local jobs that would be negatively impacted without the PTC.
All sources of energy receive some form of government incentive. If the PTC were completely repealed, the wind energy industry would be at a government-created disadvantage when trying to compete with other sources of energy. Repealing the PTC will raise taxes on a clean, domestic energy resource while destroying an American industry with thousands of jobs on the line. It’s time for Congress to extend the Production Tax Credit for wind power.
director, Southern Wind Energy Association