A group of 19 leading companies has sent a letter to Congress asking lawmakers to immediately extend a key tax credit for wind that is set to expire at the end of the year.
The diverse coalition of firms, which includes Ben & Jerry’s, Johnson & Johnson, Levi Strauss, Starbucks, and Yahoo!, says that raising taxes on the wind sector would be bad for businesses that buy large amounts of wind electricity.
These companies join a very large bi-partisan chorus of renewable energy supporters asking Congress to give the wind industry some certainty and put the sector on a level tax playing field with the oil and gas industry, which enjoys billions of dollars in permanent tax benefits.
Over the last year, the National Governor’s Association, County Commissioners, and numerous Republican politicians have all sent separate letters to Congressional leaders in support of extending federal wind tax credits for at least another year. Now this latest group of prominent companies is playing up another theme: Ending support for wind isn’t just bad for the wind industry, it’s bad for downstream non-utility companies that procure energy from wind:
As major U.S. employers and some of the largest non-utility purchasers of renewable energy, we urge you to extend the Production Tax Credit (PTC) for wind energy before the end of the 112th Congress. A failure to pass an extension will amount to levying a tax on companies committed to buying American energy and growing the U.S. economy. In today’s economic climate, a taxhike on American businesses buying American renewable energy is unwarranted.
In the past decade American businesses have significantly ramped up their purchase of American wind energy. For consumers of wind electricity, the economic benefits of the PTC are tremendous. Electricity rates, which reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market. Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks. We are concerned that allowing the PTC to expire will immediately raise prices for the renewable electricity we buy today.
The PTC has enabled the industry to slash wind energy costs – 90% since 1980 – a big reason why companies like ours are buying increasing amounts of renewable energy. Wind now supplies over 3% of US demand and accounts for 35% of new power capacity installed in the last four years. In the seven years that the PTC has been continuously in place, installed wind capacity has grown sevenfold to nearly 47 Gigawatts representing more than $79 billion in private investment.
As Congress investigates ways to spur business growth, we urge you to ensure an extension of the PTC. Failure to extend the PTC for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy and hurt our bottom lines at a time when the economy is struggling to recover. Extending the PTC lowers prices for all consumers, keeps America competitive in a global marketplace and creates homegrown American jobs.
These 19 leading companies are part of the Business for Innovative Climate & Energy Policy (BICEP), a project from the sustainability advocacy group Ceres. They say that failure to extend the wind credit will add new costs to businesses throughout the economy. Interestingly, far-right conservative groups aggressively opposed to raising taxes are the only ones coming out in opposition to the wind tax credit.
Over last five years, wind has brought $20 billion of annual private investment to the U.S., according to the American Wind Energy Association (AWEA). There are now 75,000 jobs across the country in wind manufacturing, operations, maintenance and education. However, a report from Navigant Consulting prepared for AWEA concludes that failure to extend the wind tax credit could result in up to 37,000 job losses in the coming year.
This article was originally published on Climate Progress and was republished with permission.
Lead image: Wind turbine in clouds via Shutterstock