With less than a month for Congress to wrap up unfinished business, itís time to clear the air about the wind energy production tax credit.
The federal tax incentive for wind is no different than tax incentives or favorable policies for other energy sources. This includes nuclear energy, a 60-year-old industry that has benefited from a number of federal subsidies, including what was to be a temporary federal liability policy enacted in 1957. This point gets neglected in many arguments against wind energy.
The production tax credit for wind is available only when wind energy is produced. Thereís no benefit for simply placing the turbine in the ground. Instead, itís tax relief that rewards results. Thatís much different than failed taxpayer-funded grants and loans made in pursuit of renewable energy since 2009. Wind energy detractors have blurred the distinction in efforts to undercut wind as a source of clean electricity.
A robust domestic energy supply ó both traditional and renewable ó is vital to economic growth and job creation. It doesnít make sense to pit one domestic energy supply against another. America needs all of the above ó meaning drilling for domestic oil and gas, promoting renewable and alternative energy, supporting conservation and emission-free nuclear energy. That reality should dictate an even hand from policymakers.
The wind energy production tax credit was enacted in an effort to level the playing field with coal-fired and nuclear electricity generation.
Today, thanks in great part to the tax incentive, wind energy production supports 75,000 jobs nationwide and drives as much as $15 billion in private investment. Nearly 500 American manufacturing plants for wind now exist in 44 states. Thirty-five percent of all new electricity generated in the United States during the last five years was from wind. The cost of wind energy continues to decline.
The production tax credit for wind is working and should be part of the effort in Washington to help get more Americans working. Certainty about tax policy and affordable energy are factors in economic growth. A bill in the House to extend the production tax credit for wind has 118 co-sponsors, both Democrats and Republicans. An extension, as approved with a bipartisan vote in August by the Senate Finance Committee, deserves a place in a year-end tax bill, to help give the confidence investors want and employers need to keep and hire workers. Why would Congress exacerbate the unemployment problem by failing to extend this successful incentive?
Whatís more, if Congress lets the production tax credit expire on Dec. 31, wind energy would be the only form of energy generation without any federal incentive. Oil, gas and nuclear all receive long-standing federal support. Any changes should be made in a broad-based tax reform effort that considers tax incentives across the board in an intellectually honest way. Everything needs to be on the table, not just wind.
Finally, turmoil in the Middle East emphasizes the need to develop energy sources in our own backyard. Wind energy is not dependent on far-away countries with leaders who are hostile to the United States, even as they gladly take our energy dollars.
Wind energy will stand up next to any other form of energy when given a fair shake.
Sen. Charles E. Grassley, R-Iowa, helped create the production tax credit for wind energy in 1992. A former chairman and ranking member of the Finance Committee, and now a senior member, Grassley has sponsored multiple extensions of the credit.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.