Does The Wind Energy PTC Stand A Chance In Lame-Duck Congress?


Does The Wind Energy PTC Stand A Chance In Lame-Duck Congress? With President Barack Obama gaining a second term, the wind energy industry maintains key support from the Executive Branch. But as anyone familiar with energy politics knows, backing from the president alone will not guarantee full support for wind power at the federal level.

Of course, the No. 1 priority for the wind energy industry is an extension of the production tax credit (PTC), which is set to expire at the end of this year. Failure to renew the incentive has led to widespread layoffs throughout the supply chain and has brought new wind project development to a virtual standstill, and further inaction will only magnify the repercussions.

A one-year PTC extension is currently included in a larger tax-extenders bill that was approved by the Senate Finance Committee in August. But does it have any chance of passing the full Senate and House of Representatives and, ultimately, becoming law?

According to American Wind Energy Association CEO Denise Bode, the answer is yes. On a press call Wednesday, Bode said she is confident that Congress will take up the bill in the lame-duck session.

"We look forward to immediate action when Congress returns," she said.

Bode acknowledged that although wind power alone may not be Congress' top priority, it is a crucial part of the larger economy, and its success is a critical step toward addressing the fiscal cliff.

According to Bode, a PTC extension has a solid chance of passing in the lame-duck session because the measure is included as a part of the larger bill that contains many other important economic provisions.

"We're part of a broader business package, with the R&D tax credit and a number of other items that are crucial to the economy moving forward and getting better," she said. "So I think we're part of the bigger discussion. We're not a one-off issue, so I think this just provides us greater support."

Waiting until next year to address these measures would not be wise, Bode said.

"I think we've heard pretty clearly from the Obama administrationâ�¦that we need to address these business extenders – and extenders in general – as well as the issues that would fall into the category of a fiscal cliff," she said. "So I think that the idea that they would wait and allow the economy to be so drastically impacted until next year or down the line – it just seems to me that it's not a reasonable assessment of the situation.

"I think what we've heard is that they would seek to address [the PTC] as soon as possible," she added.

Among those pushing for action on the tax-extenders bill is Senate Majority Leader Harry Reid, who said in the summer he wanted it done before the election. Likewise, Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, has clearly made the legislation a top priority.

In a statement on the Senate Finance Committee's website, Baucus called for the Senate to immediately address fiscal issues, which will likely include the tax-extenders bill.

"A first step would be for Congress to work together towards a solution to our pressing year-end fiscal issues," Baucus said. "We need to put progress ahead of politics and work towards a compromise that provides some certainty to American families and businesses. We need to craft a proposal that supports jobs, expands opportunity and puts America's economy back on track."

Gridlocked Congress
Despite these efforts, partisan gridlock remains on Capitol Hill. Although the PTC has widespread bipartisan support – including from about 30 Republican co-sponsors, according to Bode – there are some high-ranking congressional leaders who have made it their mission to block any bill containing provisions related to renewable energy or environmental protection.

For one, House Energy and Commerce Committee Chairman Fred Upton, R-Mich., has been a vocal opponent of both the U.S. Department of Energy's loan-guarantee program and the Treasury Department's Section 1603 cash-grant program, and has shot down several proposals meant to stimulate renewable energy development in the U.S., including a clean energy standard.

Therefore, even if the tax-extenders bill were to pass the Senate, it would face being modified by the House, which could strip the PTC provision, policy analysts explained at a post-election webinar hosted by law firm Bracewell & Giuliani.

According to Mike Pate, a partner with the firm who specializes in tax and legislative matters relating to energy, the environment and other issues, the fate of the PTC will depend, in part, on what the House Ways and Means Committee does with the tax-extenders bill. Tea Party leaders might also seek to block or modify the bill, Pate said, and the incentive's fate will depend on whether or not it gains enough support from others to overcome that opposition.

For his part, Pate said an extension would be more likely in the early part of next year.

However, Bode maintained that historically, the PTC has been extended at the eleventh hour and that its chances for renewal in the lame-duck session are high.

"In this industry, unlike in other energy sectors, we have come in and defended our one tax incentive time after time," she said. "And in almost every case – in fact, I think in every case – the decision made to extend it has been made in a lame-duck or similar session, right before the end of the year."

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