Governors call for PTC extension

Governors from states with wind farms and manufacturing plants to serve the industry called on Congressional leaders for an immediate extension of the federal production tax credit (PTC) that is set to expire at year’s end.

The Governors’ Wind Coalition (GWC) is seeking at least a one-year extension of the PTC. Wind projects must be put into service by Dec. 31 to qualify for the 10-year subsidy.

In a letter to Congressional leadership Nov. 13, Iowa Gov. Terry Branstad and Oregon Gov. John Kitzhaber urged Congressional leadership “to take swift action to extend the PTC before the end of this congressional session.” Branstad (R-Iowa.) is the chairman of the coalition and Kitzhaber (D-Ore.) is the vice chairman.

 “Thousands of jobs in the wind industry have already been impacted by the credit’s looming expiration and thousands more are at risk,” the governors wrote. “We urge you to take swift action to extend the PTC before the end of this congressional session.”

In a conference call led by Sen. Chuck Grassley (R-Iowa.), the father of the PTC at its inception in 1992, the officials from both parties stressed the number of jobs at risk as the industry contracts due to uncertainty. There are about 60 expiring subsidies across all industries, the so-called tax extenders that need attention before Congress adjourns for good just before Christmas. Previous extensions of the PTC have been passed in this way.

Those negotiations are ongoing in the shadow of larger discussions between House Speaker John Boehner (R-Ohio) and President Obama over the “fiscal cliff” to avoid automatic tax increases and spending cuts that kick in on Jan. 2.

“We know there are a lot of tough issues, but we think this is one that creates jobs and grows the economy,” Branstad said.

Kansas Gov. Sam Brownback (R) said the rush to build projects before the end this year led to 1,400 MW of new construction inducing $3bn in private investment. “All of those numbers go to virtually zero next year. We have virtually no new wind operations next year,” he said.

Siemens plants in Kansas and Iowa have laid off hundreds, along with hundreds more in Colorado by Vestas.

In a policy shift, the governors are willing now to consider a phase-out of the credit over the next four years or so, but the short-term extension takes precedence.

The GWC is a bipartisan group of 28 governors from across the country.