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Wind industry seeking extension of tax credit

Wind advocates are rallying for the extension of a key tax credit to bolster wind development.
BY JAY F. MARKS Published: December 2, 2011

Wind development has stalled in the past when the tax credit has been allowed to expire, dropping as much as 93 percent.

The U.S. Energy Information Administration estimates installation of new wind capacity could drop 100 percent in 2013 if the tax credit is allowed to expire.

Oklahoma State University professor Shannon Farrell said sporadic passage of the wind tax credit in the past has led to “stupid” development cycles.

Farrell said the credit, which offsets the cost of electricity generated by wind power, needs to remain in place to spur continued development, as it was intended to do.

“For now, it's a really important part of the profitability of those projects,” he said.

Wind developer Mike Bergey, president of Norman-based Bergey Windpower Co., said the production tax credit helps wind remain competitive with natural gas in power generation.

“The real economic advantage of wind is that the utilities get fixed price 15- to 25-year contracts and ratepayers get lower and more stable electric rates over the long term,” he said.

The industry has garnered much support in its quest to extend the production tax credit for another four years.

The Save USA Jobs Coalition sent a letter to key lawmakers in Washington last month. The group boasts 369 members, including Oklahoma City-based OGE Energy Corp.

“OGE Energy is in the coalition because we support production tax credits that make wind power cheaper to buy for our customers,” spokeswoman Kathleen O'Shea said. “We also support the efforts to retain and grow jobs in Oklahoma.”

The Governors' Wind Energy Coalition also has offered its support to legislation to extend the incentive for wind development. Oklahoma Gov. Mary Fallin is a member of the coalition, but she has not taken a position on the tax credit.

Also ...

Coburn opposes tax credit

A four-year extension of the production tax credit for renewable energy projects has been proposed by U.S. Reps. Dave Reichert, a Republican from Washington, and Earl Blumenauer, a Democrat from Oregon.

At least one member of Oklahoma's congressional delegation, Sen. Tom Coburn, opposes the American Renewable Energy Production Tax Credit Extension Act. Sen. Jim Inhofe and Rep. John Sullivan have not reached a decision on the extension proposal.

“Rep. Sullivan feels that all tax credits — including the production tax credit — deserve a rigorous analysis to determine whether they are a good bet for taxpayers and whether the market needs them,” spokesman Vaughn Jennings said. “With the PTC not set to expire until the end of 2012, he looks forward to analyzing the effectiveness of the credit in meeting its goal of wind generation prior to consideration of any tax extender legislation.”

Inhofe spokesman Matt Dempsey said any extension likely will be part of a package with multiple tax provisions.

“Sen. Inhofe would want to consider the bill in its entirety,” he said.



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