AWEA suggests six-year phase-out of PTC

The American Wind Energy Association (AWEA) has outlined a proposal that renews the production tax credit at 100 percent for 2013, phases it down to 60 percent by 2018, and ending thereafter.

The American Wind Energy Association (AWEA, Washington, D.C.) on Dec. 12 described what a phase-out of federal wind energy production tax credit (PTC) could look like. AWEA is lobbying for extension of the existing PTC, which expires at the end of 2012, but says that the U.S. Congress could implement a phase-out of the credit through 2018.

“Congress must extend the wind energy Production Tax Credit for projects that start next year, to save an entire U.S. manufacturing sector and 37,000 jobs that we’ll otherwise lose by early 2013. Specifically we urge Congress to extend the wind tax credit for all projects that commence construction in 2013, as adopted by the Senate Finance Committee on Aug. 2, on a bipartisan 19-5 vote,” says Denise Bode, AWEA's CEO.

The PTC provides a tax credit of 2.2 cents/kWh once the electricity is generated, for the first 10 years that a U.S. wind farm is in operation.

AWEA’s analysis specifies that the tax credit could start at 100 percent of the current 2.2 cents/kWh for projects started in 2013, and be phased down to 90 percent of that value for projects placed in service in 2014; 80 percent in 2015; 70 percent in 2016; and 60 percent in both 2017 and 2018, ending after that. 

Bode said the analysis indicates that would allow wind energy to establish a stable base market in the U.S. that the industry can build on, with further market and technology innovation. The process of developing it started last spring, included detailed economic analyses and high-level discussions with industry leaders, and culminated in approval by the AWEA Board of Directors.

The proposal is described in a letter that AWEA is sending to leaders on Capitol Hill. The letter says in part, “The wind industry recognizes that our country is facing significant fiscal challenges and is supportive of all energy technology incentives being reviewed and even phased down when Congress considers tax reform. However, the PTC has supported the wind industry in its efforts to significantly reduce the cost of producing electricity, and its continued availability for a reasonable period of time will allow the industry to invest in the cost-saving technologies required to finish the job.”

In other AWEA news, Bode announced on Dec. 14 that she is resigning, effective Jan. 1, to return to private practice as a tax attorney. “There is now a strong, bipartisan team of Congressional champions for the wind industry, and the all-important extension of the Production Tax Credit (PTC),” Bode says. “When that is secured, all of my goals from the AWEA Board will have been accomplished. I am extremely proud to have led the AWEA staff as we worked together to get that job done, and, of course, grateful to the AWEA Board for the opportunity to serve this very promising industry.”

Tom Carnahan, chairman of the Board of Directors, says, “We are grateful to Denise for her countless contributions to the wind industry as the Association has undergone a successful
transformation to a first-class bipartisan business trade association. She has been a critically important agent for change and growth at AWEA, and she will be sorely missed. We wish her continuing success."