Forty-seven Republican Members of the House of Representatives sent a joint letter to Speaker John Boehner (R-Ohio) this week announcing that they oppose including a provision to renew the wind production tax credit for another year in any broader legislation. The letter concludes, “We believe that the Solyndra scandal has demonstrated that it is time for the federal government to stop picking winners and losers in the energy marketplace. Twenty years of subsidizing wind is more than enough. Our nation can simply no longer afford to pick winners and losers in the energy marketplace. The PTC should expire at the end of the year under current law.”
Wind installations completed before the credit expires at the end of this year will still receive the 2.2 cents per kilowatt hour subsidy for ten years. The one-year extension voted out by the Senate Finance Committee in early August would actually expand the program by allowing wind investors to claim an immediate 30% investment credit instead of having to wait ten years for a full payout and by allowing projects started (but not finished) next year to qualify. The Congressional Budget Office estimates that the Senate version will cost $12 billion over ten years.
The joint letter was organized by freshman Representative Mike Pompeo (R-Ks.), who has led the effort against all energy subsidies and mandates in this Congress, including the T. Boone Pickens Payoff Plan to subsidize natural gas trucks and filling stations. Crony capitalists have hit back with numerous ads attacking him in his Wichita-centered district.
Support for the wind and solar tax credits is pretty uniform among Democratic Members of Congress. Among Republicans, it tends to split along State lines. Republican Members representing the 29 States with renewable portfolio standards (RPS) for electric utilities tend to support the tax credits because the subsidies lower the cost of renewable electricity. Republican Members representing States without renewable requirements generally oppose the credits because taxpayers from their States are subsidizing the use of renewable energy in other States. Here’s a map that shows the various state renewable requirements.
There are notable exceptions, however. For example, Kansas has a 20% RPS by 2020. Kansas’s Republican Governor Sam Brownback and Republican Senators Pat Roberts and Jerry Moran support extending the wind PTC, while Kansas Republican Representatives Pompeo and Tim Huelskamp actively oppose it.
Similarly in Colorado, which has a 30% by 2020 RPS, Rep. Doug Lamborn recently wrote an op-ed titled “Why the wind energy tax credit must go,” while freshmen Republican Reps. Cory Gardner and Scott Tipton signed a joint letter in June, along with fourteen other Republican freshmen, supporting an extension.
Gardner and Tipton are both members of the conservative House Republican Study Committee and enjoyed significant Tea Party support when they ran for Congress in 2010. Members like Gardner and Tipton oppose crony capitalism in principle, but not in practice when their own crony capitalists are the target.
The wind PTC has become a prominent minor issue in the presidential campaign. President Barack Obama has repeatedly attacked Republican nominee Mitt Romney in Iowa and Colorado for opposing its extension. Vestas, the world’s largest wind turbine manufacturer, announced this week that they think the U. S. market for wind turbines will shrink by 95% if the credit is not renewed. This is curious since 29 States still have RPS requirements that must be met in the next decade.