Wind Energy and Tax Reform

The IRS flouted Congressional intent …and knowingly transformed the PTC phase-out into a 5-year PTC extension. Without reform, the PTC tax will grow to an additional $32+ billion in the next decade, not including the credits awarded projects already operating.

Ignoring Congressional Intent
The provision of HR 1 causing the biggest uproar is the “Special Rule for Determination of Beginning of Construction,” which clarifies when a project is considered to have started construction.[2]


Following enactment of the PTC phase-out, and the incremental step-down of the subsidy for projects starting[3] [4] after 2016, Obama’s wind-friendly IRS released guidance that established a four-year development window for eligible facilities. Under the guidance, projects that start construction before the PTC expires in 2020 have four years to be placed in-service before the IRS demands details on whether development advanced in a continuous way. With only modest effort, projects could show they started construction in 2016 and avoid the declining PTC altogether.

In effect, the IRS flouted Congressional intent with its 4-year window, and knowingly transformed the PTC phase-out into a 5-year PTC extension. If anyone doubts this, see Norton Rose Fulbright’s piece declaring a project’s start construction date “irrelevant as long as construction is complete by 2020.”

Safe-harbored turbines under contract in early 2017 ballooned to between 30,000 and 70,000 megawatts (MW) with Bloomberg New Energy Finance projecting 38,000 MW of new wind being placed in service by 2020. Without reform, the PTC tax will grow to an additional $32+ billion in the next decade,[5] not including the credits awarded projects already operating.

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Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

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(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

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