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The Big Question at Windpower 2012: What About the PTC?

Despite the looming expiration of the Production Tax Credit for wind energy, WindPower 2012 kicked off with a message of confidence in continued growth.

“The wind energy industry today is no longer alternative, but it has become conventional,” said Denise Bode, CEO of the American Wind Energy Association, which hosts the event.

Wind energy in the U.S. has been growing at an unprecedented rate, Bode said, and represents 35 percent of new generation installed over the last five years. Wind energy in the U.S. will soon reach the 50 gigawatt milestone. 

Governors from two states, Arkansas and Kansas, spoke during the opening session, communicating how their states’ economies have boomed in part due to the wind industry.

“Three billion dollars of investment in wind has occurred in a 12-month timeframe in my state,” said Gov. Sam Brownback of Kansas. “The PTC has worked.”

Gov. Mike Beebe of Arkansas said his state was able to ride out the recession because of new jobs created in the wind industry. “We’re all about wind right now in Arkansas.” 

With all the growth experienced in these states and others — five states now boast at least 10 percent wind generation — the PTC is still a necessity, according to the speakers. The tax credit, set to expire on Dec. 31, was originally implemented by President George W. Bush in 2005 and provides an income tax credit of 2.2 cents per kilowatt-hour for the production of electricity from utility-scale turbines during the first 10 years of electricity production. 

According to the speakers, an unextended PTC could demobilize the industry.

Heather Zichal, deputy assistant to President Obama for Energy and Climate Change, said the wind energy industry has never had so much to lose. “If Congress doesn’t act, factories will close and tens of thousands of people will lose their jobs.”

Brownback said Kansas has more wind turbines being constructed this year than any state in America, but that without a PTC extension, manufacturing jobs will begin dropping off in the next month or so. “Developers have already begun laying people off.”

In a non-election year, Bode believes the PTC would have already received an extension. However, she remains confident that the tax credit will be extended by the end of the year.

“The PTC has the highest level of bi-partisan support than any energy industry, especially in a Congress that’s more divided than ever.” 

One politician who has not expressed support of the extension of the PTC is Presidential Candidate Mitt Romney, but Bode remains hopeful that he will soon join other conservative politicians in support of extending the tax credit.

“We think it should be the role of both the president and candidate Romney to support an all-of-the-above policy,” Bode said.

The speakers highlighted that while the PTC extension would allow for the continued short-term growth of the industry, a longer, reliable credit is needed. 

“We don't need the PTC renewed for a year. How can capital decisions be made off something that’s only renewed for a year?” Beebe said.

Brownback said a four-year phase-out of the PTC would be ideal. “I think that’s a reasonable, projectable time horizon.” 

Beebe encouraged conference attendees to stop talking to each other about wind power and start pushing it among outsiders. “Branch out and talk to people who are not connected to wind. If you don’t sell this, it won’t get sold.”

Image: auremar via Shutterstock

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