Fiscal cliff deal extends wind PTC one year
DENVER — It makes sense that Colorado Sen. Mark Udall, who gave 27 speeches on the senate floor urging the extension of the Production Tax Credit for wind energy providers, would send a press release Wednesday morning heralding the fiscal cliff compromise that also extended that credit.
“The extension of the wind Production Tax Credit is excellent news for workers in Pueblo, Windsor, Brighton and across the country,” Udall said in a statement. “Thanks to the PTC extension, I am confident the wind industry will be able to create jobs and help revitalize our American manufacturing sector.”
Udall, who faces reelection in 2014, recognizes the importance of the tax credit to Colorado’s new energy economy, especially after Vestas, the largest wind turbine manufacturer in the state, and the world, laid off several hundred workers last year due to uncertainty over whether Congress would ever move to extend the PTC.
The question is whether a one-year extension is enough to calm the uncertainty in the wind energy market that drove last year’s layoffs.
“They brought forward a pretty important change to it in Senate Finance where, if you break ground in 2013, you get the money, you don’t have to finish the project this year.
“It’s very good, but certainly not perfect,” Pete Maysmith, the executive director of Colorado Conservation Voters, told FOX31 Denver Wednesday.
“Without that extension, you were really going to see the wind industry grind to a halt or at least wind way down. And that’s not okay, because it’s a clean, non-polluting source of energy we need to power America.
“But we believe it should be more than one year. We can’t stop worrying about the PTC today, but we got a reprieve. Coloradans who are employed in the industry and who care about a clean energy future got a reprieve.”
For Vestas itself, the renewal of the PTC is a relief.
“The short-term extension provided today is critical to ensure projects move forward and orders are placed that will support U.S. manufacturing and the domestic supply chain,” the company said in a statement.
“Unfortunately, the late timing of the extension will result in a significant reduction in 2013 installations from previous years due to the time it takes from when an order is placed to project completion.”
Vestas is happy about a change to the new PTC that will allow any company that breaks ground on a wind energy project in 2013 to receive the tax credit, even if that project isn’t completed by year’s end.
Congress shelved the wind PTC extension this summer after the Republican presidential candidate, Mitt Romney, voiced his opposition to the legislation, which is supported by eight of Colorado’s nine members of Congress, including three of four Republicans.
Romney argued that it was time for the industry to stand on its own without federal tax credits and subsidies.
The industry itself, and most elected officials who have supported the PTC, believe that wind manufacturers must be weaned off the government subsidy soon.
“Having this forever doesn’t make a lot of sense and isn’t needed,” Maysmith said. “Wind becomes more cost-competitive with each month. To do a five-year phase-out is more than enough for the industry to have a firm footing.
“That’s where we hope the Congress goes this year, but this Congress is a dysfunctional as you could imagine.”