GE awaits Congressional action on wind energy tax credits

Sep 22 - McClatchy-Tribune Regional News - Richard Lee The Stamford Advocate, Conn.

A proposal to renew a federal tax credit aimed at encouraging "green power" development is hung up in Congress, possibly jeopardizing growth of the business and the players in the U.S. wind energy industry, including Fairfield-based General Electric Co., experts said.

The Production Tax Credit, which has helped the wind energy industry employ about 75,000 Americans, is set to expire at the end of 2012.

The American Wind Energy Association, which represents 2,500 member companies including GE, has been active in encouraging passage of a renewed tax credit.

Katelyn Buress, a GE spokeswoman, referred comments to AWEA, which has said layoffs in the industry are increasing in the absence of a policy signal from Congress.

Extension of the credit has been the basis for rapid growth of U.S. jobs and manufacturing since 2005, according to the AWEA. Despite that, layoffs have occurred at companies that had been investing in the alternative energy source, including Gamesa, NRG Systems, Vestas, Iberdrola and Windlogics, said Denise Bode, chief executive officer of AWEA.

"(They) represent what is happening and will continue to happen across the country in the U.S. wind industry if these businesses are not provided the policy certainty they need to continue to invest in America and its workers," Bode said in prepared comments.

Neither GE nor AWEA would comment on the potential impact on GE's wind energy business.

GE, which has been in the wind energy industry for a decade, manufactures wind turbines with rated capacities ranging from 1.5 to 4.1 megawatts. More than 18,000 of its wind turbines are in operations worldwide, generating 28 gigawatts of power.

Wind turbine production is an integral part of GE's Ecomagination strategy, which generated $21 billion in revenues in 2011. GE Energy, which includes wind energy, has more than 100,000 employees in 100 countries.

Also pushing Congress to approve the measure is the Natural Resources Defense Council, which says that beyond being a clean energy producer, the industry is fast becoming a major contributor to the economy in many parts of the country by generating new taxes and lease payments to land owners.

Wind farms generate about 50,000 megawatts of clean, renewable energy -- the equivalent of the energy produced by 12 Hoover Dams, according to the NRDC.

"Every time a wind farm gets built, American jobs are created," Cai Steger, co-author of a report entitled "At Wind Speed: How the U.S. Wind Industry is Rapidly Growing Our Local Economies." "These reports show what the PTC has done for the wind industry -- and why it's essential that it is extended."

Without the extension before the end of the year, 37,000 job losses are expected in 2013, said NRDC spokesman Bob Keefe. "We've tried to put a face on what the layoffs would look like," he said.

In August, the Senate Finance Committee passed a bill (S.3521) that included hundreds of tax credits, and among them was the Federal Production Tax Credit for Wind Energy, said Kamara Jones, press secretary for U.S. Sen. Richard Blumenthal, D-Conn.

The current provision allows taxpayers to claim a 2.2 cent per kilowatt hour tax credit for wind electricity produced for a 10-year period from a wind facility placed in service by the end of 2012. The bill would extend the credit through 2013.

Based on preliminary estimates, the proposal is estimated to have a net cost of $12.1 billion over 10 years, according to Blumenthal's office.

U.S. Rep. Jim Himes, D-Conn., said on Tuesday that while he supports extension of the tax credit, he wants to see an incentives format that would give renewable energy companies more certainty in planning their business.

"In the short term, Congress must act," he said.

"We have to come back in November with a vengeance," after the presidential and Congressional elections, he said.

Tax reform will be high on the agenda, Himes said, predicting that the tax credit program will be part of a reform package.

Blumenthal echoed Himes' comments.

"There is a strong possibility that the tax credit will be extended," Blumenthal said. "The real obstacle is partisan gridlock. It has been one of my greatest frustrations in my first 18 months in office."