WIND’S INCENTIVE PHASE OUT RUMORS

Multiyear Wind Energy PTC Phase-Out Getting Bipartisan Attention

Laura DiMugno, 15 November 2012 (North American Windpower)

“While a one-year extension of the wind energy production tax credit (PTC) remains alive in an omnibus tax-extenders bill passed by the Senate Finance Committee in August, some policymakers say the incentive could ultimately be renewed in a different form…[S]ome members of Congress - including a handful of anti-renewables House conservatives - may seek to strip the provision from the legislation…[and] many Republican lawmakers would need to be assured that the incentive will eventually go away.

“…[A] PTC phase-out…may be gaining some serious support…Sen. Chuck Grassley, R-Iowa…[and] a bipartisan group of governors - including Govs. Terry Branstad, R-Iowa; John Kitzhaber, D-Ore.; Sam Brownback, R-Kan.; and John Hickenlooper, D-Colo. - emphasized the importance of extending the PTC, as well as the economic benefits it would provide.”

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“Because of the longer timeline needed to finance and build wind projects, the governors stressed, the industry might be better served by a multiyear phase-out than by a one-year extension…Brownback said he would like to see a three- or four-year phase-out of the tax credit but admitted that a one-year extension would probably be more realistic…Grassley said he also likes the idea and that he would be in favor of a gradual phase-out of about 20% per year.

“Under the PTC-extension provision currently included in the tax-extenders bill, not only would the PTC be extended until Dec. 31, 2013, but the placed-in-service deadline would be changed to a start-of-construction deadline. In other words, projects would have to have started construction before Dec. 31, 2013, to receive the $0.022/kWh incentive…Ultimately, the fate of the PTC will depend on the priority given to the incentive as a part of measures taken to avoid the fiscal cliff…”

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