WASHINGTON, D.C. – U.S. Senator Shelley Moore Capito (R-W. Va.) today joined a group of her colleagues to introduce the Production Tax Credit Elimination Act to completely phase out the federal production tax credit (PTC) for renewables.
The bill specifies that any new projects would need to begin construction by the end of this year in order to qualify for the credit, as is the case under current law.
“When the renewable energy production tax credit was implemented, it was intended by its authors to be a temporary support for a generation technology that was then too expensive to compete. Since then, we have seen renewables take greater market share, particularly wind energy production, and yet the tax incentive remains in effect. This creates an unfair advantage against other energy sources, such as power plants fueled with West Virginia coal and natural gas. I’m proud to join my colleagues again to reintroduce this legislation that would level the playing field within our electric markets. We should not be wasting more taxpayer dollars on a credit that completed its goal years ago,” Senator Capito said.
The bill, authored by U.S. Senator James Lankford (R-Okla.), would allow any project that previously qualified, or will qualify before the end of this year, to receive the value and duration of the tax credit that was in place at the time the project qualified. The bill would ultimately remove the PTC from the tax code once projects qualifying in 2021 finish receiving what is promised to them under current law to guard against future extensions of the credit and to provide certainty around when PTC-related tax expenditures will disappear.
The PTC was established nearly three decades ago as part of the Energy Policy Act of 1992 and since its adoption, wind power has grown tremendously into a self-sustainable, multibillion-dollar industry. Wind generation has grown more than 3,000 percent, and capacity has spiked from 1,500 million megawatts in 1992 to over 110,000 megawatts recently. Meanwhile, the cost to taxpayers for the PTC for all qualified renewables has increased from $5.7 billion over the first five years of the credit to $19.5 billion over the 2019-2023 period.
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