In a recent blog post at Human Events.com, Congressman Doug Lamborn (R-Colo.) outlines an energy policy that would mean thousands of Coloradoans losing their jobs, the loss of billions of dollars of new private investment, and continued hardship for our nation’s rural communities.
Many Republicans and Colorado representatives in Congress do not share Mr. Lamborn’s views on wind power production policy.
Recently, on two separate occasions, Republican members of both the House of Representatives and the U.S. Senate took action to support the renewable energy Production Tax Credit (PTC), which Mr. Lamborn opposes. On June 27, 18 House Freshmen, including 16 Republicans, sent a letter to House leadership requesting immediate extension of the PTC. And on August 2, with six Republican Senators voting in favor, the Senate Finance Committee voted 19-5 to approve a package of tax measures including extension of the PTC.
That support is bolstered by the bulk of Colorado's Congressional delegation. In February, Senators Mark Udall (D) and Michael Bennet (D) and Representatives Diana DeGette (D), Cory Gardner (R), Ed Perlmutter (D), Jared Polis (D), and Scott Tipton (R) joined in a letter backing a PTC extension.
Additionally, the National Association of Manufacturers and the American Farm Bureau Federation are among over 400 organizations and companies endorsing the PTC extension. In a joint letter to Congressional leadership they wrote, “It is urgent that we avoid the looming tax increase on wind energy, as investments are stalling now and will continue to stall, with corresponding job losses, until a bill to extend the PTC is passed.” In testimony to Congress, the U.S. Chamber of Commerce also supported extending the PTC.
The benefits of wind power are impressive. For example, in Colorado, wind power supports up to 5,000 construction and maintenance jobs and wind project owners are paying $10 million a year in taxes to state and local governments. In total, the American wind industry currently attracts up to $20 billion in private investment annually, all driven by the PTC.
The U.S. wind industry is also a growing market for American manufacturing. Over 470 manufacturing facilities across the U.S. make components for wind turbines, and dedicated wind facilities that manufacture major components such as towers, blades and assembled nacelles can be found in every region.
Over the past five years, the U.S. wind industry has added over 35% of all new generating capacity, second only to natural gas, and more than nuclear and coal combined. And U.S. wind power capacity represents more than 20% of the world's installed wind power.
Looking to the future, according to a Department of Energy (DOE) study completed during the George W. Bush Administration, generating 20% of America’s electricity from wind by 2030 – a goal the industry is ahead of schedule to meet – would support roughly 500,000 good jobs in the U.S., with an annual average of more than 150,000 workers directly employed by wind companies.
But this promise of development hinges on intelligent energy policy.
The PTC is tax relief that only rewards results and doesn’t cost taxpayers a dime. It pays for itself, through federal, state and local taxes paid by the expanded industry, including wind farm operators and their employees.
As Republican strategist Karl Rove said recently, “It is a market mechanism, you don’t get paid unless you produce the power, and we’re not picking winners and losers, we’re simply saying for some period of time we will provide this incentive as we scale up and get improvements in technology.”
In recent years, the PTC has always been a short-term policy mechanism, extended in one- to three-year increments, even having been allowed to expire several times before being renewed. This on-again, off-again approach contrasts sharply with federal incentives for traditional energy sources, which are typically permanent parts of the tax code.
With the PTC being up for renewal again, the wind industry is facing the recurrence of the boom-bust cycle it has seen in previous years when the PTC was allowed to expire. In the years following expiration, installations dropped between 73 and 93%, with corresponding job losses. According to Navigant Consulting, 37,000 Americans stand to lose their jobs by the end of the first quarter of 2013 if Congress does not extend the PTC.
Regarding costs, in many areas, wind helps to lower future energy costs. For example, the Southern Company said last year in signing its first contract for wind energy, “The price of energy from the wind facility is expected to be lower than the cost the company would incur to produce that energy from its own resource … with the resulting energy savings flowing directly to the Company’s customers.”
Data from the U.S. Department of Energy shows that for the 40 states with the least amount of wind installed and the District of Columbia, electricity prices rose by an average of 25% between 2005 and 2010. In contrast, for the top 10 states in wind generation (with wind providing between 5% and 15% of electricity), electricity prices increased an average of only 11%, or less than half as much. There are many factors that influence the price of electricity, so this isn't necessarily proof that more wind will automatically lead to lower prices. What is clear is that the data stands in strong opposition to those who have tried to make unsupported claims that wind energy increases electricity prices.
The PTC is still needed to bring the wind industry across the finish line – to achieve full cost competitiveness with other, long-subsidized energy industries, and to offer electric consumers the full benefit of low-cost wind power that will never run out.
If Mr. Lamborn wants to claim he supports an all-of-the-above energy policy, he ought to join his fellow Coloradans and support this common sense, successful, bipartisan policy.