4. ENERGY POLICY:
Alexander preps push to repeal wind, oil tax breaks
Published:
Advertisement
One of the Senate's staunchest opponents of wind-industry tax incentives is ramping up an effort to nix them -- along with tax breaks enjoyed by the oil and gas industry.
Sen. Lamar Alexander (R-Tenn.) has listed ending tax credits for the wind and oil industries among his top legislative priorities on energy this year.
"These are not your grandma's windmills," Alexander said today at an event in Washington, D.C., hosted by the Heritage Foundation. "We should end wasteful long-term special tax breaks such as those for Big Oil and Big Wind."
Last summer, Alexander voted with his party against a measure that ultimately failed that would have rolled back some tax credits for the oil and gas industry, although he has supported some level of repeal in the past.
But he hasn't wavered on his stance against wind subsidies.
Alexander said he would be content to let the renewable energy production tax credit of 2.2 cents per kilowatt-hour expire at the end of this year. The credit -- which grants companies that produce electricity from renewable energy sources like wind or geothermal a subsidy for the first 10 years of a facility's operation -- has been in place since 1992, although it has been extended several times.
The American Wind Energy Association says the credit has led to 47 gigawatts of new wind capacity in the United States, and the trade group is lobbying hard to see it extended for at least another year.
But Alexander said the credit has done more harm than good.
"One problem with the wind subsidy is, it has encouraged developers to build wind projects in places where the wind doesn't blow or doesn't blow very much," Alexander said, citing the example of what he called a failed wind farm in Tennessee. "Looking for wind power in the Southeast is a little like looking for hydropower in the desert."
But his plan to watch that credit go the way of other expired energy tax credits, like one for ethanol that expired last year, could be foiled by Democratic efforts to renew the credit. Language calling for such an extension has been listed as a possible amendment to the transportation reauthorization bill that could come to a vote in the Senate later this week or next.
If such language is included in the highway bill -- and if it passes -- Alexander said he's prepared to introduce standalone legislation to eliminate the credit and other credits claimed by the oil and gas industry. He would rather see the money spent on more energy technology research and development in programs like the Energy Department's Advanced Research Projects Agency-Energy or the small modular nuclear reactors program.
"We're a strong country. We need large amounts of cheap, reliable clean energy, and we need a balanced federal budget," Alexander said. "This is an energy policy that can help us do both."