Lobbying blitz to save tax credits for wind energy

Windmill by USTIN / Shutterstock.com

Article Highlights

  • An all-star lineup of lobbyists is fighting to save a tax credit for wind energy that expires at midnight Monday.

    Tweet This

  • A CBO study found that the Production Tax Credit was the biggest tax expenditure for renewable energy in 2011.

    Tweet This

  • As Congress drives toward the "fiscal cliff," will the wind and solar companies crash and burn?

    Tweet This

An all-star lineup of lobbyists, featuring former congressmen and many of Obama's closest allies, is fighting to save a tax credit for wind energy that expires at midnight Monday.

Congress created the Production Tax Credit in 1992 as a way of supporting the wind power industry until it could be self-sufficient. Twenty years later, the PTC is still subsidizing the likes of General Electric and Siemens and has been expanded to include solar and biomass. Companies get a tax credit of a penny or two for every kilowatt-hour their windmills or solar panels produce in their first 10 years. It's worth $1.4 billion a year to its beneficiaries.

The credit was set to expire at the end of 2012 for wind power and at the end of 2013 for other sources of renewable energy.

A Congressional Budget Office study found that the PTC was the biggest tax expenditure for renewable energy in 2011, after the ethanol tax credit, which has since expired.

The CBO study said tax credits like the PTC "are generally an inefficient way to reduce environmental and other external costs of energy. They often reward businesses for investments and actions they intended to take anyway."

A big reason why businesses would build windmills or solar installations anyway: Many states require utilities to purchase a certain amount of renewable energy. Given this captive audience, it's easy to see why the tax credits are more gravy than incentive.

The lobbying team to renew the tax credit is formidable, packed with Obama's closest corporate confidants as well as former congressmen from both parties.

General Electric in 2002 inherited Enron's wind energy business and is now the top U.S.-based supplier of wind turbines and a leading lobbying force for extending the PTC. The company is famously cozy with the Obama administration. CEO Jeffrey Immelt has served as Obama's jobs czar for two years.

GE spent more on lobbying Washington in Obama's first term -- $120 million from January 2009 through September 2012 -- than any other company. GE's hired guns lobbying on the PTC include the K Street firm McBee Strategic Consulting.

McBee is a premier lobbying force on green energy subsidies. The firm is also pushing the PTC on behalf of Obama-friendly Google, which has invested a billion dollars in wind farms and other green energy. Google was Obama's No. 3 source of funds, according to data from the Center for Responsive Politics, and CEO Eric Schmidt has been floated as a possible commerce secretary.

China-based Goldwind, the second-largest wind turbine manufacturer in the world, is also paying McBee to lobby on the PTC, federal lobbying filings show.

Germany-based Siemens is lobbying on the PTC, led by its VP for federal lobbying, David McIntosh. McIntosh was a Democratic Senate aide before serving on Obama's transition team, then held various senior roles in Obama's Environmental Protection Agency. He gave the maximum donation to Obama, skirting Obama's prohibition on lobbyist donations because he made the donations on June 23, 2011, and didn't register as a lobbyist until the third quarter, which began nine days later.

Billionaire Obama adviser and fundraiser Warren Buffett is also behind the push to renew the credit. His company Berkshire Hathaway owns MidAmerican Energy, which describes itself as "No. 1 in the nation in ownership of wind-powered capacity among rate-regulated utilities." Lobbying filings show MidAmerican lobbying on the PTC.

NextEra Energy is a leading beneficiary of the PTC. NextEra has retained K Street powerhouses Quinn Gillespie & Associates. The company, which has paid no corporate income tax in three years despite billions in profits, also retains Capitol Counsel, a leading lobbyist on the PTC.

Capitol Counsel's Jim McCrery, the former congressman who was recently the top Republican on the tax-writing House Ways and Means Committee, lobbies on the tax credit for NextEra. He also represents the American Wind Energy Association, the wind industry's D.C.-based lobbying group.

McCrery is not the only former congressman lobbying on the tax credit. Delaware Republican Mike Castle, now at DLA Piper, is lobbying for Cape Wind, while Maryland Democrat Albert Wynn, at Dickstein Shapiro, is lobbying for Covanta, which turns trash into energy.

As Congress drives toward the "fiscal cliff," will the wind and solar companies crash and burn? Or will their lobbying team bail them out?

Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Timothy P.
Carney
  • Timothy P. Carney helps direct AEI’s Culture of Competition Project, which examines barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy.


     


    Follow Timothy Carney on Twitter.

  • Email: timothy.carney@aei.org

What's new on AEI

image The money in banking: Comparing salaries of bank and bank regulatory employees
image What Obama should say about China in Japan
image A key to college success: Involved dads
image China takes the fight to space
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Event Registration is Closed
Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.