More than 50 representatives sign letter to end PTC

A lawmaker from Kansas, and more than 50 of his congressional colleagues, have issued a letter saying that it is time to let the production tax credit (PTC) for wind energy expire.

Wind energy now has a U.S. fleet that exceeds 60,000 MW and more than 43% of all electric capacity installed domestically in 2012 came from wind, Rep. Mike Pompeo (R-Kan) said in the letter to House Ways and Means Chairman Dave Camp (R-Mich).

“As you will recall, during the closing hours of the last Congress, the Senate-passed tax extenders package that included an extension of the PTC was inserted into the American Taxpayer Relief Act of 2012 (ATRA),” Pompeo wrote in the Nov. 14 letter.

“The extension included in ATRA modified the eligibility criteria for the PTC to allow facilities that are merely under construction to qualify, eliminating the 20-year-old placed in service requirement for the credit and tripling the score of the provision to well over $12 billion as a consequence,” Pompeo said.

Originally, the wind PTC included in the Energy Policy Act of 1992 provided wind producers a 1.5 cent subsidy for every kilowatt hour (KWh) for the first 10 years of operation for a wind power facility.

The Treasury Department has expanded the value of the credit over the years so that today it is worth 2.3 cents KWh, Pompeo wrote. “Further, Treasury has interpreted ATRA’s modification expansively and issued guidance that if a wind project developer merely places a 5% deposit on a project initiated in 2013, it will have at least until 2015 and possibly 2016 to place in the project in service and obtain the PTC,” said the Kansas lawmaker.

That means that a wind project that ‘begins construction’ in 2013 could receive subsidies until 2026, Pompeo said.

“This constitutes a more than generous phase-out for a credit that is being awarded to a mature technology with over 60,000 megawatts of generation installed across the country,” Pompeo said.

Pompeo said he had over 50 co-signers to the letter. While most are Republicans, Rep. Nick Rahall (D-W.Va.) is among the Democrats who signed onto the letter.

Wind industry supporters have said they don’t want an abrupt end to the PTC and would like to see it replaced with other incentives such as real estate investment trusts (REITs).

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at