PTC extension proposed in Senate

Bi-partisan senators and several colleagues in Iowa, a key wind state, have introduced a two-year extension of a subsidy that is slated to lapse at year’s end.

Iowa senators Tom Harkin (D) and Charles Grassley (R) introduced a two-year extension of the production tax credit (PTC) late last week. They were joined by Mark Udall (D-Colo.), Scott Brown (R-Mass.), Dean Heller (R-Nev.), Ron Wyden (D-Ore.), and Michael Bennet (D-Colo.). These states have extensive wind resources or have manufacturing companies located in them.

The move comes just days after an amendment for a one-year extension to a transportation bill, proposed by Sen. Debbie Stabenow (D-Mich.) was rejected.

“Tax relief has succeeded in developing this clean, renewable and innovative energy source, and it ought to be continued with the degree of certainty that encourages continued investment,” Grassley said.

Grassley sponsored the first PTC in 1992 and has been instrumental in several renewals since. When the credit has lapsed, wind capacity additions have immediately plummeted.

The wind industry has said that jobs are at risk if the 2.2 cent per kWh credit is not extended. Vestas Wind Systems has threatened 16,000 layoffs at its four Colorado plants without the extension.

“Immediate extension of the PTC is critical in order to save 37,000 U.S. wind manufacturing jobs that will otherwise be lost in the next year,” said American Wind Energy Association CEO Denise Bode. “Advancements in wind technology have resulted in a steady decline of the cost of electricity from wind, and we’ve been clear that we don’t need the PTC forever. We are just asking to finish the job. One of America’s fastest growing new manufacturing sectors would be lost if the PTC is not extended.”

Another key renewable energy subsidy that expired in December, the Section 1603 cash grant in lieu of the tax credit, was not included in the latest proposal.

Stabenow’s amendment would also have extended the 1603 cash grant program.