As Layoffs Mount, Governors Seek Support on Wind Tax Credit

With election season politics behind them, several governors are reapplying pressure on Congress to extend a tax credit whose looming expiration is stirring angst within the wind industry.

Along with negotiations on how to steer the nation away from an approaching fiscal cliff, Congress, which began its lame-duck session on Tuesday (November 13), will consider renewing the multi-billion dollar wind production tax credit. It’s one of many renewable energy incentives set to expire at year’s end.

The Governors Wind Energy Coalition, a bipartisan group of 23 state executives, is hoping to catch lawmakers’ attention, saying the issue is urgent.

“It needs to be extended again,” Iowa Governor Terry Branstad said Tuesday at a Capitol Hill briefing. “We’ve begun to see the negative impacts and loss of jobs in our state.”

In 2011, wind power made up nearly one-third all capacity added to the nation’s energy grid, its growth second only to that of natural gas. But uncertainty over the credit’s fate has prompted layoffs in several states.

In Iowa, where the wind industry employs people in 54 of 99 counties and generates 20 percent of the state’s energy, two turbine manufacturers have laid off more than 500 employees in recent months. In Colorado, a state running on 9 percent wind power, a turbine manufacturer laid off 182 employees and said more than 1,600 more jobs — mostly in Colorado — are at risk.

Last April, the American Wind Energy Association said the industry could shed 37,000 jobs by end of the first quarter of 2013 without an extension.

As Stateline has reported, energy experts are filing 2013 as a down year for the industry — even if the credit survives. That’s because investment this year has all but halted.

“We have virtually no investment this year after having $3 billion the year before,” Kansas Governor Sam Brownback, a Republican, said during the briefing. Wind production is “critical, it’s happening and it needs this extension to continue,” he said. 

But breaking through Congress’ impasse could prove difficult. Though the subsidy is not a partisan issue in state legislatures, it is in Congress, where many Republicans — though few who represent wind states — have lined up to oppose the measure, questioning whether the government can afford to dole out the generous incentive. In his presidential campaign, Mitt Romney promised to leave the wind credit — and others like it — for dead.

The credit would cost about $5 billion if extended another year, said U.S. Senator Chuck Grassley of Iowa, who proposed the original legislation in 1992 and is now trying to rally support from his colleagues.

Grassley and Branstad say they are optimistic the credit will survive another year. They say the policy could be phased out as the industry gains more equal footing with coal, natural gas and nuclear power.

“We know this is something that’s not going to last forever,” Branstad said.

Should Congress refuse to act, Branstad told Stateline, “there’s not a great deal states can do,” to make up for the lost support.