House Energy Bill Moves Without Wind Power Credit

This week, House committees in the U.S Congress are finalizing their versions of The Energy Policy Act of 2005, a broad-ranging package of energy policy legislation. A vote could occur as soon as this week, giving congressional lawmakers the second chance in as many years to secure passage of comprehensive energy legislation.

The American Wind Energy Association (AWEA) said that while the House energy bill does not contain a provision to extend the wind energy Production Tax Credit (PTC), leaders of the House Ways and Means (tax) Committee signaled their intention to extend the credit through other means. The Senate – not expected to act on energy legislation until the summer – may choose to include a PTC extension in its bill. The PTC is the wind power industry’s primary policy objective. As in previous years, the House energy tax package also does not contain a newly proposed 30 percent tax credit for small wind systems rated 75 kW and below. This provision was contained in last year’s senate energy bill. According to AWEA, because the Ways and Means committee was working under extremely tight budget constraints the panel is seeking to extend the PTC outside of the energy bill as part of a package of expiring tax provisions attached to an upcoming budget bill. Last year the tax committee had $25.7 billion to spend on energy tax credits. This year’s bill allots only $8.1 billion for all energy tax credits. As a result, the energy tax package adopted by the Ways and Means Committee will not include a PTC extension, nor will it include a number of other popular existing tax items such as the credit for alternatively fueled clean cars. With a comprehensive energy bill moving slowly through the Senate, advancing the PTC through means other than the energy bill may allow for a PTC extension at an earlier date. During consideration of the energy tax package, Ways and Means Committee member Rep. Jim Nussle (R-Iowa) spoke in favor of a five-year PTC extension. Numerous other members of the panel also expressed their support for a long-term PTC extension as soon as possible. Working in the House Energy and Commerce Committee, Rep. John Shimkus (R-Ill.) successfully removed a provision from the bill that would have required energy project developers to pay the full costs of any new power lines or transmission upgrades. AWEA worked in coalition with a number of energy interests to support the Shimkus amendment to remove the so-called “participant funding” language from the bill. The issue may arise again, however, as the bill moves toward later stages in the process. The committee rejected a federal Renewable Portfolio Standard (RPS) amendment by Rep. Frank Pallone (D-NJ) calling for 20 percent of the nation’s energy to be supplied by renewables by the year 2027. In the House Resources Committee, Rep. Jay Inslee (D-Wash.) gained passage of an amendment to cut in half the level of royalties paid to the federal government (from $2,365 per megawatt per year to $1,182.50) from wind development on lands administered by the Bureau of Land Management (BLM). In the House Government Reform Committee, Chairman Tom Davis (R-Va.) gained approval of an amendment requiring the federal government to purchase 7.5 percent of the energy it uses from renewable sources “to the extent economically and practically feasible.” AWEA said this language – which had been contained in previous House and Senate-passed energy bills – significantly waters down the effectiveness of the provision, making it essentially voluntary. Information courtesy of AWEA
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