If the latest proposal for the wind Production Tax Credit (PTC) is approved, it would dramatically decrease the incentive’s amount and eventually phase it out altogether.
Introduced on Thursday by U.S. House of Representative Committee on Ways and Means Chairman Dave Camp, (R-MI), the new proposal would retroactively reduce the credit from about 2.3 cents per kilowatt-hour of produced energy to 1.5 cents. The incentive would then be eliminated in 10 years.
Despite a nationwide scramble by businesses hoping to qualify for the credit before it expired in December, Camp’s plan presents an unlikely scenario—that industry members actually said they won’t need the incentive much longer.
“Businesses in the wind industry have represented to the committee that the industry could survive with a credit worth 60 percent of the current credit, implying that the credit provides a windfall that does not serve the intended policy,” the plan reads.
Additionally, 50,000 people signed a petition to renew the incentive and sent it to new Senate Finance Committee leader Ron Wyden, D-OR, just two weeks ago. Before that, the members of the Governors Wind Energy Coalition asked Congress to extend the PTC. They centered their argument around an estimated 5,000-plus layoffs that took place within the industry in late 2012 because of the impending expiration of the PTC. The credit expired Dec. 31, 2012, but Congress temporarily extended it two days later.
“The legislation is highly unlikely to be enacted in its current form,” Jeff Davis, a partner at law firm Mayer Brown, told North American Wind Power.
Still, Davis told the publication that Camp’s stance that the Internal Revenue Service safe harbor requiring continuous construction for wind projects started by Dec. 31 is too liberal could have a “chilling effect on the wind industry and participants as to what it takes to satisfy the ‘commence construction’ requirements.”
Camp’s proposal is part of a nearly 200-page draft of his tax reform act. According to his plan, the PTC provision would increase revenues by $9.6 billion.
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