As the deadline to extend a key tax credit for wind energy nears, threatening to deal a blow to the industry, advocates are asking two Texas congressmen to vote for extending the credit.
Texas leads the nation in installed wind capacity, with more than 10,000 MW of wind power providing nearly 10 percent of the state’s electricity. Advocates are urging representatives Quico Canseco (R-San Antonio) and Blake Farenthold (R-Corpus Christi) to demand a floor vote in the U.S. House before the lame duck session.
The representatives’ districts are big wind production zones, with 926 MW and 1088 MW, respectively, of installed generation. In Canseco’s district, the Anacacho Wind Farm under construction near Uvalde will add another 99 MW when it goes online next year.
On Thursday, members of the BlueGreen Alliance, The Wind Coalition and American Shoreline, Inc. outlined the need for renewing the federal production tax credit before it expires at the end of the year.
“Wind energy has helped grow our economy and has kept the lights on,” said Dave Cortez of Texas BlueGreen Apollo Alliance. “Congressmen Canseco and Farenthold have an opportunity to take politics out of this equation and put working families first by giving wind power the same long-term support provided to other sources of energy.”
There are 7,000 wind-related jobs in Texas, according to industry group The Wind Coalition. Director Jeff Clark says some of those jobs will be lost if the tax credit is not extended, citing the Sierra Club’s finding that nearly 2,300 wind jobs have already been lost nationwide since the beginning of 2012 due to uncertainty surrounding the credit’s expiration. The wind industry says 37,000 jobs will be lost nationwide if the credit expires, though there are not yet any projections for how many Texas jobs would be lost.
But opponents of the tax credit, which subsidizes wind power by 2.2 cents per kilowatt-hour, say the industry will always need a federal crutch to compete with other energy sources. Mitt Romney upset some farm-state Republicans by saying he’d end the tax credit. Support for the wind industry has become an important election issue in states like Iowa, where farmers increasingly rely on wind turbines for income.
“Right now the wind power industry is getting a huge tax credit,” Farenthold said, according to the Raymondville Chronicle. “That is taxpayers’ money. I think they should be treated like anyone else.”
But wind energy advocates argue that all new energy sources initially need support, and that the tax credit is working as it’s supposed to.
“The capacity factors are becoming stronger and stronger and are competitive with coal and gas generation, but obviously innovation needs to be incentivized—the oil and gas industry was incentivized in its infancy,” Amshore Project Developer Jeff Neeves said. “Technology always needs to have some support to advance and to beat the monopoly of the status quo and the wind industry needs a temporary subsidy. I think that’s the big misconception, that this is some sort of long-term subsidy for the industry and it’s not; it’s just a means of incentivizing this new technology.”
A 2011 study commissioned by The Nuclear Energy Institute in Washington, D.C., found that the federal government provided energy incentives of $594 billion for oil, natural gas and coal between 1950 and 2010, $335 billion of which was in the form of tax concessions. In that same period, wind, solar and biofuels combined received $74 billion, or about 9 percent of total incentives.
If extended, the production tax credit, signed into law by President George H.W. Bush as part of the Energy Policy Act of 1992, would cost about $1 billion per year.
“I don’t begrudge wind farms,” Canseco said in May, according to the Midland Reporter-Telegram. “But we don’t just need wind farms. We are sitting on a mother lode of oil and natural gas,” he added, echoing the oft-used rhetoric that Obama is “picking winners and losers” in energy.
But Neeves said letting the subsidy expire could set the U.S. back decades and would result in lost jobs, revenue and grid stability.
“It doesn’t make sense to vote against that,” Neeves said. “To me it’s voting against the interests of your own district and constituents if you don’t support the production tax credit and you don’t support the incentivization of innovation and progress.”