Lankford Introduces Bill to Eliminate Wind Tax Credits
Philip Wegmann /
The winds could soon be changing on Capitol Hill. Today Senator James Lankford, R-Okla., introduced legislation that would gradually eliminate federal energy tax credits for a decades-old wind subsidy.
Originally designed as a temporary buoy for an emerging industry, the Wind Production Tax Credit (PTC) was included in the Clinton administration’s Energy Policy Act of 1992. Since then, the program has been extended nine separate times.
The current wind PTC expired at the end of 2014. Lawmakers have moved to retroactively renew the credit. During a July markup, the Senate Finance Committee made provisions for a two-year extension at an estimated cost of $10.5 billion over the next decade.
Lankford wants to end this cycle by deleting the subsidy directly from the tax code. The bill would permanently sunset the provision, phasing it out completely by 2026.
In a press release, Lankford’s office celebrates the “major strides made over the past two decades” by the wind industry, gains that Lankford believes prove the industry has become “efficient and self-sustainable.”
With the support of PTC, domestic wind generation has grown steadily from 2.8 million megawatt-hours in 1992 to 167.6 million megawatt-hours currently. According to the most recent numbers released by the U.S. Energy Information Administration, wind makes up 4.4 percent of electricity generation.
This year the U.S. Department of Energy has renewed their call to boost that figure to 20 percent by 2030.
Lankford argues that the industry has already become sustainable on its own. The freshman senator believes that continuing the taxpayer wind burden is unnecessary.
“The [current] subsidy is estimated to cost taxpayers $16.6 billion over the next five years,” he explains. “There is no need for the taxpayer to continue to subsidize a wind start-up tax credit.”
Already in the House this April, Rep. Kenny Marchant, R-Texas., delivered identical legislation that would also end the credit. That bill, H.R 1901, has quickly gained 47 cosponsors.
Yet the effort to delete wind subsidies will likely face serious headwinds.
Last month the American Wind Energy Association, and five hundred various businesses from eBay to Macy’s, penned an open letter urging lawmakers to offer a “permanent extension of the expired and expiring tax provisions.”
Lankford’s office tells The Daily Signal that the senator hopes to soothe industry fears.
Rather than eliminating the credit immediately, the phase out period provides an element of certainty, allowing businesses to plan ahead. Companies already enrolled in the program could continue to take advantage of the credit until 2026.
By gradually sunlighting the wind PTC, the freshman senator hopes to make the legislation more politically palatable.