Wind energy Production Tax Credit extended through 2005

September 27, 2004 -- CropChoice news: The American Wind Energy Association (AWEA) reported on September 24 that the wind energy production tax credit (PTC) – a critical factor in financing new wind power installations – will be reinstated through 2005 as part of a major tax package (H.R. 1308) extending a number of individual and business tax provisions. The House and Senate approved the bill September 23, and President Bush is expected to sign it into law. The PTC now provides a 1.8-¢/kWh tax credit (adjusted annually for inflation) for electricity generated with wind turbines.

The PTC, which had expired December 31, 2003, will be extended retroactively from that date to December 31, 2005. AWEA continues to support a longer-term extension (to December 31, 2006) now included in the corporate tax/JOBS (Jumpstart Our Business Strength) bill (H.R. 4520) still pending before Congress. The JOBS bill also calls for creation of a new tax credit to encourage the use of small wind systems for homes, farms, and small businesses.

“The American wind energy industry welcomes Congressional passage of a 15-month extension of the wind energy production tax credit,” said AWEA deputy executive director Tom Gray. “This action by Congress and the expected signature of President Bush mean that about $3 billion in wind energy investments forecast over the next several years are now back on track across the country. More importantly, hundreds of furloughed wind industry employees can now go back to work building and installing new high-tech wind turbines.

“We believe wind energy can provide 6% of U.S. electricity by the year 2020, or about as much electricity as hydropower generates today, and this action allows us to go forward toward that goal. AWEA will continue to pursue policies – such as a long-term PTC extension and a renewables portfolio standard (RPS) – that will move the wind industry beyond the boom-and-bust cycles that have resulted from short-term PTC extensions in the past.”

The delay in extending the PTC came following a banner year for the U.S. wind industry, in which it installed a near-record 1,687 MW of generating capacity, enough to serve nearly half a million average American homes. This year, a sharp drop in new installations is expected due to the absence of the incentive for nine months.

“Gaining the PTC extension became a reality through the cooperative leadership of Sens. Chuck Grassley (R-Iowa) and Rep. Bill Thomas (R-Calif.),” said AWEA legislative director Jaime Steve. “AWEA is also very appreciative of strong efforts by Sens. Max Baucus (D-Mont.), Byron Dorgan (D-N.D.), Tom Daschle (D-S.D.), Harry Reid (D-Nev.), Kent Conrad (D-N.D.), Gordon Smith (R-Ore.), Jeff Bingaman (D-N.M.), Mike Crapo (R-Idaho), Norm Coleman (R-Minn.), Jim Jeffords (I-Vt.), Tim Johnson (D-S.D.), Tom Harkin (D-Iowa), and many others,” Steve said. “On the House side, Reps. Jim McCrery (R-La.), Mark Foley (R-Fla.), Bob Matsui (D-Calif.), Jerry Weller (R-Ill.), Ron Kind (D-Wis.), Jay Inslee (D-Wash.), Mark Udall (D-Colo.), and Greg Walden (R-Ore.) were vital in gaining this extension.”


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