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Congress not acting on credits despite job fears

September 16, 2012

DES MOINES - There is little hope Congress will act quickly to extend a federal energy tax credit for building wind turbines, despite the likelihood that letting the program expire could lead to the loss of thousands of jobs.

The issue is especially important in Iowa, where 20 percent of electricity is generated by wind turbines and the state ranks second behind only Texas for installed wind capacity. An estimated 7,000 workers in Iowa are employed in more than 250 businesses associated with the wind industry.

Extension of the tax credit is caught up in deep differences over spending in Congress, where fiscal conservatives in the Republican Party are fighting renewal even as other GOP members push to have the program continued. The issue also has spilled into the presidential race, with Democratic President Barack Obama supporting the credit and Republican Mitt Romney opposing it, angering Iowa Republican Sen. Chuck Grassley and Gov. Terry Branstad.

Article Photos

Pictured is a wind turbine at the Laurel wind farm. Congress seems unlikely to extend a federal energy tax credit for building wind turbines, which would be trouble for Iowa where 20 percent of electricity is generated by wind turbines.

Grassley said at a forum in Burlington in August that Romney's stance "was just like a knife in my back."

Branstad spokesman Tim Albrecht said Friday that the governor supports extending the tax credit and that he has spoken with Romney's policy advisers on the issue. Albrecht said the conversations were private and he declined to elaborate.

Grassley, the author of the original tax credit in 1992, introduced a bill that would extend it for a year. Grassley said he fought to get wind energy reinserted in a Senate bill after it had been earlier removed. The wind tax credit is among 50 or 60 other tax extensions in the bill.

"The wind-energy production tax credit is designed to level the playing field for this renewable resource against coal-fired and nuclear electricity generation," he said.

The Senate Finance Committee approved a bill, but Grassley doubts the measure will come up for a vote before the November election. He hopes for a Senate vote later in November or December, but its fate in the Republican-controlled House is uncertain.

The policy uncertainty has already caused job cuts as wind energy producers delay new projects until it's clear whether the credits will be renewed.

The American Wind Energy Association, a trade group, has estimated that as many as 27,000 jobs could be lost next year if the credit expires, about 3,000 in Iowa.

Katana Summit, a Columbus, Neb.-based wind tower manufacturer, will close plants in Columbus and Washington around Nov. 1, laying off nearly 300 workers, said CEO Kevin Strudthoff, who blamed his company's problems on uncertainty about tax credits.

"Business has completely fallen off. Developers are not placing orders until they know what happens with the policy," he said.

It's frustrating that politics is hurting an industry that is bringing production into the United States from other countries, creating new jobs for U.S workers, Strudthoff said.



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