Starbucks, J&J, Yahoo! fight to extend wind energy tax credit
Nineteen companies including Starbucks, Ben & Jerry's, Johnson & Johnson and Levi Strauss have sent a letter to Congress requesting that it extend the wind production tax credit (PTC) before it expires at the end of 2012.
They also plan to escalate contact with lawmakers over the coming weeks.
The companies seek to counterbalance the letter sent by 64 conservative groups last week which argues for Congress to let the PTC expire.
Progressive businesses believe in the benefits of clean energy, Amy Hargroves, Sprint's manager of corporate responsibility, told The Hill. "From my perspective, there's been a greater organized effort against supporting this, so they've been far more vocal," she says. "We need our voices to be heard. We think it's important to have more green energy choices in the U.S."
Eliminating the PTC will make it harder for progressive companies to meet their renewable energy commitments. Sprint, for example, has a target of getting 10 percent of its energy from renewables by 2017.
The letter, sent by the group Business for Innovative Climate and Energy Policy (BICEP), which is part of Ceres, argues that allowing the 2.2 cent per kilowatt-hour incentive for wind production to lapse would amount to a tax hike on American businesses that buy renewable energy.
"Extending the PTC lowers prices for all consumers, keeps America competitive in a global marketplace and creates homegrown American jobs," says the letter.
Companies signing the letter include Akamai Technologies, Annie's Inc., Aspen Skiing Company, Ben & Jerry's, Clif Bar, Johnson & Johnson, Jones Lang LaSalle, Levi Strauss & Co., New Belgium Brewing, The North Face, Pitney Bowes, Portland Trail Blazers, Seventh Generation, Sprint, Starbucks, Stonyfield Farm, Symantec, Timberland and Yahoo!
The wind PTC has become a galvanizing issue in the U.S. Presidential campaign, with Mitt Romney against it and President Obama for it.
However, there's little hope for a decision until after the November Presidential election, when Congress returns for a lame-duck session.
The PTC passed the Senate Finance Committee in August as part of a $205 billion package that would extend various tax incentives, but it has yet to be called for a vote on the Senate floor. This week, the House Ways and Means Committee meets to discuss expiring tax credits, including the wind PTC.
Even if Congress renews the PTC at the last minute, it would only be for one year, doing little to stem business uncertainty. Numerous companies including Vestas have already idled turbine manufacturing production capacity and projects have been scrapped.
The latest casualty is Molded Fiber Glass, a wind turbine blade manufacturer in Aberdeen, South Dakota, which just laid off 92 of their 370 employees. Total layoffs for the U.S. wind industry now stand at 2,299 since the beginning of this year. Fifteen companies in 14 states are considering or have already announced layoffs or canceled projects.
Wind projects accounted for a full third of all generation capacity added to the grid last year, growing 31 percent during the year. The pace of installations quickened early this year in anticipation of the expiration of the PTC.
The U.S. wind industry supports more than 75,000 jobs in all 50 states. 20 percent of Iowa's and South Dakota's electricity comes from wind and with the right policies in place, the industry is on track to produce that amount across all of the U.S. Last month the industry hit a historic milestone - it surpassed 50 gigawatts of capacity, enough to power nearly 13 million American homes.
"Dear Speaker Boehner, Majority Leader Reid, Minority Leader Pelosi, Minority Leader McConnell:
As major U.S. employers and some of the largest non-utility purchasers of renewable energy, we urge you to extend the Production Tax Credit (PTC) for wind energy before the end of the 112th Congress. A failure to pass an extension will amount to levying a tax on companies committed to buying American energy and growing the U.S. economy.
In today’s economic climate, a tax hike on American businesses buying American renewable energy is unwarranted. In the past decade American businesses have significantly ramped up their purchase of American wind energy. For consumers of wind electricity, the economic benefits of the PTC are tremendous. Electricity rates, which reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market. Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks. We are concerned that allowing the PTC to expire will immediately raise prices for the renewable electricity we buy today.
The PTC has enabled the industry to slash wind energy costs – 90 percent since 1980 -- a big reason why companies like ours are buying increasing amounts of renewable energy. Wind now supplies over 3 percent of US demand and accounts for 35 percent of new power capacity installed in the last four years. In the seven years that the PTC has been continuously in place, installed wind capacity has grown sevenfold to nearly 47 gigawatts representing more than $79 billion in private investment.
As Congress investigates ways to spur business growth, we urge you to ensure an extension of the PTC. Failure to extend the PTC for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy and hurt our bottom lines at a time when the economy is struggling to recover. Extending the PTC lowers prices for all consumers, keeps America competitive in a global marketplace and creates homegrown American jobs."