For Immediate Release January 2, 2007 |
Contact: Douglas Tiffany Report lauds benefits of wind tax credit as 109th Congress passes extension St. Paul, MN...Fresh Energy, a regional non-profit working for renewable energy, energy efficiency, and global warming solutions, has issued a report examining the role of the federal production tax credit (PTC) in promoting renewable sources of energy. The study, written by University of Minnesota economists C. Ford Runge and Douglas G. Tiffany, and co-sponsored by the State of North Dakota and the John Deere company, looks at methods for promoting locally based wind energy. “This study concludes that the single most important federal incentive to invest in wind is the Congressional Production Tax Credit. We concur,” said Dee Long, former speaker of the Minnesota House of Representatives and retiring Transportation Policy Program Director at Fresh Energy. “It remains part of the Congress’ tangible commitment to renewable energy in the region and nation.” The release of the study coincides with action in the closing hours of the 109th Congress to grant a one-year extension for the program, which had been scheduled to expire on December 31, 2007. The credit will now run through December 31, 2008. The action provides continuity for significant growth and investment for wind energy in the region, lending stability to the renewable energy sector, which has suffered since its adoption from numerous short-term extensions. Legislators from the Midwest Region were critical to the passage of the extension. Iowa Senator Charles Grassley, author of the Wind Incentives Act of 1992, which first established the production tax credit, said, “Investors need certainty about tax policy before putting their money into a wind energy or biomass project. The tax extension gives them certainty for another year.” The Runge-Tiffany report points out the need for a longer PTC extension than is currently in place. The study highlights the disruption in wind developments due to the uncertainty of previous extensions. The authors suggest a reauthorization and extension of up to a decade, emphasizing that “an extension, of 6 to 10 years, could be accompanied by two- to three-year benchmarks in which total use of the credits is appraised and its fiscal impacts tallied by the Congressional Budget Office. If these impacts should exceed circuit-breaker levels, PTC availability could then be rationed. This provision would assure a longer term commitment to its use, while controlling budget exposure.” Members of Minnesota’s congressional delegation are uniformly in support of additional and longer PTC extensions. Senator Norm Coleman recognizes the negative impacts of the uncertainties of previous extensions. According to the Senator, “when the PTC lapsed in 2004, wind development nationwide virtually ground to a halt. For a state like Minnesota, which jockeys with Iowa for third and fourth place in wind development, such pendulum swings have real economic consequences.” Newly elected members of the Minnesota delegation are also well aware of the significance of longer term extensions. Senator-elect Amy Klobuchar endorses a multi-year extension with the safeguards recommended by the Runge-Tiffany report. Klobuchar points out that “the planning and permitting processes for new wind facilities can take up to two years or longer to complete. As a result, developers who depend on the PTC may hesitate to begin the process due to the uncertainty of the credit still being available when the project is completed.” First District Congressman-elect Tim Walz, whose district includes areas with the state’s greatest wind potentials, points out that a greater degree of certainty will encourage community owned wind development, with the PTC available as “a financial tool for helping farmers to own the turbines themselves.” The Runge-Tiffany report is available at http://www.fresh-energy.org/publications/report_ptcstudy.pdf - end - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fresh Energy is a nonprofit organization leading the transition to a clean energy system. One that supports the health of our economies, our people, and our environment while moving us toward energy independence. www.fresh-energy.org |