Colorado’s senior senator, Democrat Michael Bennet, wants to extend the wind-energy tax credit. He is absolutely right. More formally known as the Production Tax Credit, it benefits the environment, adds good-paying jobs and boosts Colorado’s economy. It should be extended indefinitely.
What the wind industry needs more than anything is long-term stability. It cannot expand reliably with its supportive tax credit continually in doubt.
Critics of the tax credit argue that wind power has had long enough to develop into a self-sustaining industry that should not need a tax break. Most of that talk seems to come from group with heavy ties to fossil fuels, particularly coal.
What that criticism ignores, however, is the extent of the effective subsidies built into the laws, regulations and tax codes governing the production and consumption of fossil fuels, again most especially coal. While it is being replaced by natural gas to an increasing degree, coal has historically been the fuel most often used to generate electricity simply because it is inexpensive.
But to a large degree, that price advantage stems from the fact that both producers and consumers are allowed to ignore coal’s real costs. Even with the most modern power plant technology, were coal companies and utilities required to pay the full cost of the damage coal actually does to the environment, the climate and people, the comparative price of coal would look considerably different. And perhaps the fish in Southwest Colorado’s lake would be mercury-free.
Natural gas is, of course, cleaner than coal. But from drilling to burning, it is nonetheless more polluting than wind or solar power. A subsidy to tilt the balance to favor such alternative sources still makes sense.
All the more so in that wind power also means good, sustainable jobs for Colorado. Bennet says the wind industry has created 5,000 in Colorado alone. That includes in manufacturing, subcontractors and maintenance. Moreover, the job of a technician maintaining a windmill in Colorado cannot be outsourced to the Third World.
Congress did recently extend the Production Tax Credit – but only through the end of 2014. As Bennet has said, “It was actually in the case of wind, a two-week extension.”
With the credit now expired, getting something to encourage wind energy going forward takes on an enhanced sense of urgency. Bennet points out that while the U.S. economy is growing, wages have not seen a corresponding increase. He sees the energy industry – traditional and renewable – as one sector that helps drive up wages.
As the senator put it, “There are actual high-paying manufacturing jobs right here in the United States that are vital to the supply chain for wind energy.”
In Bennet’s vision, continuing the Production Tax Credit would be part of a larger, permanent reform of the tax code to foster innovation in all parts of the energy industry. And in that view, this is not a partisan issue.
Republicans and Democrats have an interest in promoting jobs in their states and in securing this country’s energy supply in both strategic and economic terms. Bennet would have them working together on the Senate Finance Committee to reinstate the Production Tax Credit.
Given that this state’s new senator, Republican Cory Gardner, hails from the part of the state where wind energy – and wind-energy jobs – are most prominent, perhaps that bipartisan cooperation could begin in Colorado. That could be as meaningful as the tax credit itself.
