The wind energy Production Tax Credit (PTC) would be extended for one year (through December 31, 2004) as part of a package of expired tax credits being added to the foreign tax bill (also referred to as the corporate tax reform bill) (S. 1637) likely to pass the Senate in late March.
This effort to provide a short-term fix for the industry is expected to play out over the next two months as the House acts on a similar bill (H.R. 2896), according to AWEA legislative director Jaime Steve. The decision to attach the PTC and a handful of other tax items also contained in slow-moving energy policy legislation was made by Senate Finance Committee Chairman Chuck Grassley (R-Iowa), the panel's senior Democratic member, Max Baucus (Mont.), and Energy Committee Chairman Pete Domenici (R-N.M.).
A full three-year PTC extension (through December 31, 2006) is still moving forward as part of the slimmed-down energy policy bill (S. 2095), which may be acted on by the Senate in late March or early April.
The PTC provides a 1.8 cent per kilowatt-hour tax credit (adjusted for inflation) for electricity produced using wind resources during the first 10 years a qualifying wind farm is in operation. As of this writing, the inflation adjustment is not included in S. 2095 (i.e., the credit would be frozen at 1.8 cents), but it is included in the short-term extension provided in S. 1637. The credit expired on December 31 of last year.
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