U.S. Senator Proposes Renewable Energy PTC Extension

South Dakota Senator John Thune (R) introduced legislation that would boost the nation’s capacity to develop wind energy. The Wind Energy Development Act of 2007 would extend the current Renewable Energy Production Tax Credit (PTC), which is set to expire in 2008, through 2012.

The PTC is an important incentive because it provides a 2 cent-per-kWh (kilowatt-hour) tax credit for renewable electricity production, which makes wind energy more competitive with other forms of energy production such as coal, hydropower, and natural gas. Extending the PTC through 2012 would give the wind industry a consistent and reliable economic incentive and encourage manufacturers to invest in and expand facilities in the U.S. In the past, Congress has allowed the PTC to expire numerous times, only extending the credit for one or two years at a time. These inconsistencies led to a “boom-and-bust” cycle in wind energy development. Plus, under this legislation the amount of Clean Renewable Energy Bonds would increase to $2.25 billion. Rather than a traditional interest-bearing bond, these bonds would provide tax credits in lieu of interest to the bondholder. In addition to expanding the amount of bonds that are available for expanded clean energy projects, a portion of the bond funding would be set aside for public power entities, Indian tribes, and cooperative electric companies. “To avoid a looming energy crisis, we need to explore every possible source of renewable, home-harnessed energy, such as wind power — an under-utilized resource that has the potential to provide cost-effective energy to millions of Americans,” said Thune.
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