Posted on December 17, 2013
Senators call on Senate Finance Committee to let wind production tax credit expire; Alexander says billions being wasted could go toward budget agreement to reduce debt or replace sequester
“Congress is struggling to find $63 billion to spend in the budget agreement, when all we have to do is get rid of the wasteful wind production tax credit. For the next 10 years, extending the tax credit one year at a time could cost $60 billion or more. Using the wind production tax credit to pay for all or part of the budget agreement would do this country more good than extending this subsidy for expensive, low-quality wind electricity ever could.”
– Lamar Alexander
WASHINGTON, Dec. 17 – U.S. Senator Lamar Alexander (R-Tenn.) and a bipartisan group of senators today sent a letter to Senate Finance Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah), calling on them to let wind power “stand on its own” in the marketplace by allowing the wind production tax credit to expire as required under current law.
The bipartisan letter, led by Alexander and Senator Joe Manchin (D-W.Va.), states that after more than 20 years and eight extensions, a 1992 tax credit originally intended to boost a fledgling technology is now subsidizing a “mature technology,” wasting taxpayer money and distorting energy markets by “picking winners and losers.” It requests that the Finance Committee exclude the wind production tax credit – which under current law will have provided $22 billion to wind producers between 1992 and 2022 – from any legislation the committee may consider.
The letter was signed by several members of the Senate Committee on Energy and Natural Resources. Signatories include Senators Alexander, Manchin, Tom Coburn (R-Okla.), Jeff Flake (R-Ariz.), Mike Lee (R-Utah), Ron Johnson (R-Wis.), Tim Scott (R-S.C.), Jeff Sessions (R-Ala.), Jim Risch (R-Ida.) and John McCain (R-Ariz.)
“Congress is struggling to find $63 billion to spend in the budget agreement, when all we have to do is get rid of the wasteful wind production tax credit,” Alexander said. “For the next 10 years, extending the tax credit one year at a time could cost $60 billion or more. Using the wind production tax credit to pay for all or part of the budget agreement would do this country more good than extending this subsidy for expensive, low-quality wind electricity ever could.”
The senators write, “Our nation’s energy policy must make economic sense for taxpayers and not manipulate markets. Continuation of the wind PTC not only picks winners and losers, it is distorting our energy markets and it's past time to end a temporary tax credit that was put into law in 1992. After more than 20 years, and tens of billions of tax-payer dollars, it’s time to let the wind PTC expire and continue to invest in new technologies.”
In the letter, the senators call for the Finance Committee to let the wind production tax credit expire as scheduled at the end of 2013 and not consider any kind of extension, pointing out that wind producers will continue to qualify for subsidies if the wind facility is placed in service before Jan. 1, 2016. As it stands now, the wind production tax credit will have given $22 billion to wind producers by 2022, according to the most recent estimate from the Congressional Research Service. That doesn’t include additional subsidies to wind as part of President Obama’s federal stimulus bill, which total another $12.9 billion, according to the U.S. Treasury.
The letter also describes how the wind production tax credit is wasting taxpayer money on what the Obama administration has called a “mature technology” while distorting energy markets, putting cheaper and more reliable forms of energy, such as coal and nuclear, at a competitive disadvantage.
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