Tax credit key to harnessing wind

03/18/2012 12:00 AM

03/16/2012 8:30 PM

To ensure Kansans have access to a reliable and affordable supply of energy, we must develop more of our nation’s natural resources. One resource that is plentiful in Kansas is wind.

Our state has the second-highest wind-resource potential in our country and leads the nation in wind-production capacity currently under construction. If we expect the wind-energy industry to provide for our country’s future energy needs and make long-term investments in their businesses, Congress must reauthorize the wind-production tax credit that expires this year.

By extending the wind PTC, Congress will allow the wind industry to complete its transformation from being a high-tech startup to becoming cost-competitive in the energy marketplace. Failure to do so will result in a tax hike on wind-energy companies and only further delay this industry’s ability to compete.

There are those who view government intervention in the energy sector as picking winners and losers. But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business.

The wind PTC has led to $20 billion in annual private investment in our energy infrastructure. Today, the American wind industry includes more than 400 manufacturing facilities in 43 states. In 2005, just 25 percent of the value of a wind turbine was produced in the United States compared with more than 60 percent today.

Because of their proximity to wind farms, American workers can produce the critical components at a lower cost than their European and Asian counterparts. As more components are manufactured in the United States and not overseas, the cost to produce electricity from wind farms will be further driven down.

If the wind PTC is allowed to expire, local economies across our state will suffer. Kansas counties will lose $3.7 million in annual payments from wind companies. Kansas landowners will lose nearly $4 million annually in additional income they earn from leasing or selling their land for wind farms. And every Kansan ultimately will be affected, because the power generated by these wind facilities contributes to our supply of electricity.

Temporarily extending the wind PTC is not about picking winners and losers – it is about preparing our country to meet our growing energy demand. Rather than make it more difficult for the private sector to develop energy sources, we should lower taxes, reduce regulations and allow the private sector to succeed in the free market. In turn, the wind industry will grow and become fully competitive – no longer needing the wind PTC. By strengthening American energy production, our country’s future will be stronger and more secure.

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