Feb. 6, 2016 SIGN IN | REGISTER

Greater Federal, State Roles Sought to Help Develop Offshore Wind Potential

Chris Maddaloni/CQ Roll Call File Photo
Carper has led the charge in Congress to give prospective developers of wind energy greater tax certainty.

The tax arguments are not new for a clean-energy resource. Onshore wind proponents lobbied hard for an extension of their prized production tax credit during the fiscal-cliff negotiations at the end of 2012. The agreement included a one-year patch for the investment tax credit — which is more beneficial to offshore wind developers because of their projects’ larger size — in addition to a modification allowing companies to claim the benefits once they begin construction, rather than when they start generating electricity.

Sen. Thomas R. Carper, D-Del., has led the charge in Congress to give prospective developers greater tax certainty. He has proposed leaving the 30 percent investment credit in place for the first 3,000 megawatts of offshore wind power produced, giving developers five years to get a facility into the water. That model is intended to offer certainty for developers and an expiration date for budget hawks.

“This is a way that allows not even having to go year-to-year to the tax-writing committees,” said Jim Lanard, president of the Offshore Wind Development Coalition.

Carper, who is expected to reintroduce the legislation with Maine Republican Susan Collins as early as this week, says the significance of tax policy to growing the industry isn’t likely to change anytime soon, given historically low natural gas prices that have edged utilities away from coal but prevented most from committing more forcefully to renewables.

“If the price of natural gas stays low, then the tax policy and providing certainty and predictability becomes all the more important,” he said.

The Energy Department also is working to propel projects beyond the research-and- development stage, leading a competitive demonstration program that will fund up to three finalists to advance their wind farms to the commercial stage by 2017.

The federal government alone can’t persuade developers to commit to the long lead times and high capital costs associated with offshore wind farms. States play an integral role in creating markets for the power, and a few are moving closer to making that happen.

New Jersey passed a law in 2010 to spur the creation of a renewable-energy certificate program requiring a percentage of the power sold within the state to be derived from offshore wind. The state could be poised to accept bids for utility-scale wind farms later this year.

Legislation that would subsidize wind projects off the Maryland coast by requiring utilities to purchase offshore energy credits — and later charging ratepayers up to $1.50 per month — is winding its way through the state legislature after failing twice before.

“The states have to be comfortable that this policy works for the residents of that state, and that evaluation is almost always going to be made on economic development, job creation and manufacturing opportunities for the state,” Lanard said.

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