Production Tax Credits

Floor Speech

PRODUCTION TAX CREDITS -- (Senate - June 17, 2008)

Mr. TESTER. Mr. President, I rise to emphasize the importance of extending the production tax credits for renewable energy in the tax package we are voting on today at 2:15. These tax credits have helped create a strong and growing renewable energy industry, not only for wind power but also for geothermal, biomass, and landfill gas. Wind power, especially in a State such as Montana and across the country, is critically important, but we have a long way to go before renewable sources of energy can have the full impact on lowering energy costs and fighting climate change. That is why these tax credits are so very important.

Last year the United States installed more than 52 hundred megawatts of wind power, enough to power a million and a half households for an entire year. Put another way, if the population--every man, woman, and child in Montana and Wyoming--each had their own house, there would be a million and a half homes.

All that wind power was about a $9 billion investment into the economy. Wind now powers over 4.5 million homes in the United States. At this rate, the United States will overtake Germany as the world's leader in wind power next year, but only if we extend this tax credit. Unfortunately, everything grinds to a halt if the tax credits are not extended.

Congress has let these tax credits lapse before. Each time we have seen growth in the renewable energy industry flatline. This chart shows exactly what happens when we refuse to extend the tax credits. Over the last 9 or 10 years, you can see where the high bars are, where wind energy megawatts have gone on. That is with the tax credits. When we failed to extend tax credits, we see virtually no growth in wind energy.

I know a lot of my colleagues will be voting to extend these credits by year's end, but waiting until the last minute is just as bad as letting them expire. Right now wind developers are working out financing for future projects. They cannot move these projects forward without certainty. That means projects that are starting right now will stall if we don't re-up these tax credits today.

We have heard a lot for the last few months about energy costs and climate change. Renewable energy is attractive because it can help us get a handle on both problems. Wind is getting more and more affordable and more efficient each year, especially as fossil fuel costs go up.

The wind power capacity added last year accounted for 30 percent of all new energy brought online. Because of the wind, we are keeping 28 million tons of carbon dioxide out of the air. That is 28 million tons. There is no more efficient way to help fight climate change than by supporting the tax credits that drive renewable energy. It is just common sense.

Last month, the Department of Energy reported that the United States can get 20 percent of its power from wind by the year 2030, but we need to quit talking about wind power and get some more turbines off the ground and into the air. Wind power means real dollars and cents and real jobs and economic development, especially for rural America.

The first commercial wind farm in Montana started operating in 2005 in Wheatland County. Wheatland County has a population of about 2,000 people and a median household income of about $24,000 a year. In 2007, the wind farm paid over half a million dollars in property taxes to State and local governments. That included nearly a quarter of a million dollars to the local school district. It brought in jobs and royalty revenue for landowners.

Wheatland County, as you can tell by the name, is a farming, agricultural county. Folks there have spent the last century cursing the wind. Today, the local Chamber of Commerce calls Wheatland County the Wind Energy Capital of the United States. Next weekend, Wheatland County is putting on its first Festival of the Wind. Their slogan is to ``honor the wind, celebrate our community, and move forward to a vital future.''

With high gas and food prices, wind power is not just a mirage on the horizon. In fact, we have only skimmed the surface of our potential. To put things in perspective, Montana produces about 150 megawatts of wind-generated electricity. Montana is almost exactly the same size as Germany. Germany has about 22,000 megawatts of wind power. The entire United States has only 16,000 megawatts. Montana will double its wind production this year. Next year, we hope to have a new wind energy transmission line between Montana and Alberta, and we will double it again. But we need that production tax credit in place, not only for next year but well into the future.

Already this year, things have started to slow as developers anxiously watch Congress. One wind farm currently under construction is racing the clock to start selling power before year's end. Developers are scrambling to take advantage of the production tax credit. Their plans for several other wind farms are on hold until the production tax credit is passed here.

I cannot overstate the significance of the production tax credit to my State of Montana and throughout rural America for economic development. But our country cannot afford to let it lapse because of climate change and because of high energy costs.

High costs might be an underestimate. I just read yesterday that companies are raising power prices to the tune of 29 percent. That is 29 percent. That means ordinary folks all across this country are going to have to make some very difficult decisions as they sit around their kitchen tables. We cannot afford to sit back and just talk about it. It is time to get to work, and the work starts today by passing this extension, not by waiting until the end of the year.

That is why I appreciate the leadership of Senator Baucus on continuing to bring this measure forward. I believe that passing an extension now will send a good signal to business that Congress is serious about wind power. ongress can invest in renewable energy that will help control energy costs and fight climate change. I urge my colleagues once again to support this measure and to vote yes and pass it today.

Mr. President, I yield the floor and suggest the absence of a quorum.

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