Koch-backed groups move fast post-election to head off wind-power tax credit
Conservative groups funded by the oil billionaire Koch brothers dumped millions of dollars this year into electing Republicans to Congress, and now they are looking to take advantage of coming Republican control on Capitol Hill.
Groups like Americans for Prosperity and the American Energy Alliance are ramping up efforts this week to quash tax credit extensions for wind power that could be passed in the next few months before newly elected Republicans generally supportive of Koch-backed policy proposals — like Colorado U.S. Rep. Cory Gardner — take office in January.
“Congress should reject efforts to extend the wind production tax credit during lame duck session before the members the American people have chosen in the recent elections are seated,” wrote Americans for Prosperity Director of Federal Affairs Brent Gardner in a letter to Congress sent Monday. “Americans for Prosperity requests that you reject any package that includes the expired tax credit. A vote for the [credit] is a vote in support of President Obama’s destructive climate action plan.”
The tax credit has gone a long way to helping developing the wind industry in the United States and to creating jobs in Colorado, home to major wind turbine manufacturer Vestas. The Danish company runs four plants in the state. Plants in Windsor and Brighton make vast turning blades and the one in Pueblo makes soaring towers.
Supporters of the credit program say it creates a reliable budget for turbine production, which is costly, due in part to the fact that the industry is still relatively young and undeveloped in the United States.
But last year was a banner year for wind, as the Denver Post reported. Vestas took in 900 orders for its turbines and sought to hire 850 people to work in its Colorado factories. In March, the company reported employing 1,450 Coloradans. Vestas is also looking to protect itself from the shifting fortunes of the U.S. domestic market by manufacturing turbines in Colorado for overseas projects.
The politics around renewable energy is fraught — mainly for the way it has been targeted by the influential fossil-fuel industry lobby. Oil-backed organizations like Americans for Prosperity have worked hard to kill the tax credit. In 2012, when Congress voted not to renew the tax credit, the burgeoning wind industry reeled. Colorado Democratic U.S. Senators Mark Udall and Michael Bennet spearheaded moves to re-up the tax credit plan, pointing to the jobs in Colorado and around the country the industry was making and the clean energy it was helping to produce.
Congressman Gardner has supported extending the tax credit in the past, but his successful campaign this election season to unseat Udall received major support from the Koch-affiliated groups.
The tax credit under consideration is “equal to $22 for each megawatt-hour that a new wind farm generates,” as the Denver Post reported.
The Koch-brothers-backed “free market” organizations often frame their attacks on the tax credit (and renewable energy more generally) as ideological, making the case that forcing new-energy companies to weather market forces is the best way to test their viability and strengthen the wider energy field.
But there is no “free-market” in the energy sector.
The oil-and-gas industry is way out ahead in almost every respect, enjoying enormous and distorting market share — partly due to the boost it has received from government. The oil industry, after coal, fueled the industrial revolution of the late-19th and 20th centuries and has enjoyed myriad tax breaks and subsidies as a result. Industry lobbyists still work the halls of Congress tirelessly and in vast numbers to trim tax rates and boost profits. Indeed, despite notching record profits, the oil industry benefits from billions in tax write-offs, earmarks and subsidies every year.
Below, the letter sent to Congress on Monday by Americans for Prosperity.
On behalf of more than two million Americans for Prosperity activists in all 50 states, I write to express our strong opposition to the wind production tax credit (PTC). We urge you to reject efforts to extend this handout for the wind energy industry as you consider tax extender legislation. A 1-year extension would cost $13 billion over the next decade.
This past April, AFP sent letters to the Senate Finance Committee and the House Ways and Means Committee, strongly urging members to oppose the PTC. “American taxpayers and ratepayers have seen little return on this forced investment in wind energy over the past 20 years. We see wind power continue to break its promises of long-term job creation, economic activity, and affordability,” we stated in the House letter, and our concerns remain.
Currently there are efforts to introduce new phase down schemes to the tax credit over a period of time, but these efforts are misguided and would instead function as full extensions. The tax credit has an existing phase-down built in under current law—even though the tax credit was allowed to expire at the end of 2013, current beneficiaries will continue to receive the tax credit for 10 years. Furthermore, the goal of these phase down proposals may be diluted by ongoing actions of the IRS to expand the definition for eligibility for the PTC.
While discussions about restoring the wind production tax credit are reemerging on Capitol Hill, there remains strong opposition from your constituents and taxpayers to extending it. This past June, AFP led a broad coalition of 110+ organizations representing millions of Americans in calling on Congress to allow the wind PTC to remain expired. In addition, over the past two years, tens of thousands of Americans for Prosperity activists have contacted their elected officials, urging them to oppose extending this costly subsidy.
In particular Congress should reject efforts to extend the wind PTC during lame duck session before the members the American people have chosen in the recent elections are seated.
Americans for Prosperity requests that you reject any package that includes the expired wind production tax credit. A vote for the PTC is a vote in support of President Obama’s destructive climate action plan.
Brent Wm. Gardner
Director of Federal Affairs
Americans for Prosperity
[ Photo of Mike O’Malley on the July 18, 2014, Executive Energy Leadership tour at Cedar Creek Wind Farm in Grover, Colorado, via the National Renewable Energy Lab in Golden. By Dennis Schroeder.]
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