Speeches & Floor Statements
Floor Remarks of U.S. Senator Lamar Alexander (R-TN) on "Tax Credits for Renewable Sources of Electricity"
Posted on April 4, 2008
Mr. President, I believe the amendment I offer on behalf of the Senator from Arizona, Mr. Kyl, and myself would improve the amendment offered by the Senator from Nevada and the Senator from Washington. As I listened to them talking, their concern is for emerging technologies, for businesses that are trying to develop emerging technologies to have time to plan, and so they offer a 1-year extension of the production tax credit, which gives a 1 cent per kilowatt hour tax credit to most emerging technologies producing electricity for commercial sales. Some renewable electricity sources receive a larger 2 cents per kilowatt hour credit. I would propose, along with Senator Kyl, that we make it a 2-year extension for emerging technologies. The way we would pay for that so it would not be any more expensive than the proposal they have offered is to do with wind what we have already done with solar: take it off the list of 2-cent-per-kilowatt-hour technologies and put it on the 1-cent list. In other words, we would be creating a 2-year extension of the production tax credit for renewable technologies. We would be treating wind the same way we treat open-loop biomass, small irrigation power, landfill gas, trash combustion, qualified hydropower, and wave and tidal facilities. They all would receive 1 cent per kilowatt hour. I think it makes much more common sense today, if we want to encourage emerging technologies, to treat them the same, especially because wind has had a preferential treatment since 1992. What has happened, Mr. President, is wind has gobbled up most of the money that has been spent through the production tax credit, and very little has gone to any of the other technologies. The taxpayer has spent an enormous amount of money to build large wind turbines in this country. According to the Joint Committee on Taxation, we are committed to spending another $11.5 billion over the next 10 years for wind power alone, even though wind power produces less than 1 percent of all of our electricity and less than 3 percent of our clean electricity. Nuclear power produces nearly 70 percent of our clean electricity; that is, no nitrogen, no sulfur, no mercury, and no carbon for those concerned about climate change. If we were subsidizing nuclear power at the same rate we subsidize wind power for clean energy, we would be spending $300 billion or $400 billion over the next 10 years for nuclear power. So wind has been gobbling up the available money for renewable energies, and making it difficult to identify appropriate offsets to pay for long-term extensions of this renewable electricity tax credit. We have spent an extraordinary amount of money on wind. Wind has already proven that where the wind blows, it works. It is competitive. And where it does not blow, it is not competitive. In the Southeastern United States, for example, there is one wind farm. Because of the generous wind subsidies, this wind farm on the top of a lovely mountain, Buffalo Mountain in Tennessee, last August, in the middle of a drought when we were all sweating and turning up our air conditioners, was operating 10 percent of the time. It makes no sense to pay big subsidies to people in Chicago to build wind farms in places where the wind doesn't blow. So what we are suggesting, Senator Kyl and I, is to let us take the available money and let us extend for 2 years the production tax credit, and let us let some of it go to open-loop biomass, more to small irrigation power, more to landfill gas and trash combustion, and qualified hydropower and wave and tidal power, and it would also go for wind. It means the wind part of the tax credit would be for 2 years and wind would still receive about $1 billion of the $6 billion or $7 billion that the Ensign-Cantwell amendment would consume. So I ask my friends to seriously consider this not as an unfriendly amendment to renewable energy but as a friendly amendment. I have met with a lot of people who say we desperately need some certainty in business. Well, 2 years is twice as much certainty as 1 year, and there is no reason at this stage of development of energy why wind, which is well proven where the wind blows, and which has been subsidized so heavily since 1992, should continue to be subsidized at the expense of certainty in our tax policy and at the expense of all of the other renewable energies. So in summary, Mr. President -- and I will have more to say about this next week -- we believe the Alexander-Kyl amendment would improve the Ensign-Cantwell amendment by doubling the time the production tax credit is available to emerging renewable technologies. And the way we would pay for it is to treat wind the same way we treat open-loop biomass, small irrigation power, landfill gas, trash combustion, qualified hydropower, and wave and tidal power. They would be treated the same, and they would be given a chance over 2 years to flourish rather than 1 year. I thank the Chair, and I yield the floor.