Job losses related to uncertainty over the wind production tax credit (PTC) are adding up quickly.
In the last month alone, wind companies around the US moved to lay off more than 1,130 workers – with Colorado, Florida and Iowa especially hard hit.
Every company says the expiration of the PTC at the end of December is the reason for the cuts, which are a result of dropping demand for product.
This week, for example, LM Wind Power in North Dakota referenced the incentive when it announced plans to lay off 345 workers. "It is important to emphasize that the challenging situation in the U.S. wind market is not specific to LM Wind Power, nor to Grand Forks manufacturing facilities," says the company. "The whole sector is affected."
This year, companies in Arkansas, Kansas, Ohio, and Pennsylvania have either cancelled projects or laid off employees.
The world’s biggest wind turbine maker, Vestas Wind, plans to cut at least another 1,400 US jobs next year if the wind incentive isn’t extended.
NextEra Energy Resources, which owns 44% of US wind farms, will only invest $505 million in new farms next year, down from $2 billion in 2010, and has no plans for new investments after 2015.
"There’s a boom-bust cycle in our industry," Steve Stengel, a spokesman for NextEra, told the Wall St. Journal. "When the PTC is in effect, there are a lot of projects. And when it lapses, very little is built."
Overall, at least 37,000 wind jobs will be shed quickly if the wind credit expires, estimates the American Wind Energy Association (AWEA). Over the past five years, the PTC has inspired $20 billion in private investment and the creation of 75,000 jobs, they say.
Exelon Lobbies Against PTC
Exelon Corp, the biggest US nuclear utility – which operates 17 nuclear plants – has joined the chorus that’s calling for an end to the PTC.
It spent $5.1 million to influence Congress in the first half of 2012, reports The Fiscal Times.
The company is lobbying so hard against the PTC, that AWEA made an unprecedented move in early September and kicked Exelon out as a member of the trade association.
“They’re leading the campaign to defeat our industry’s number one priority,” says Peter Kelly, the top lobbyist for AWEA, explaining the unprecedented move.
Exelon controls about 900 megawatts (MW) of wind-generated electricity in a dozen projects, supplying 3% of its electricity, but that’s miniscule compared to the 97% that comes from nuclear energy.
“The wind energy PTC distorts today’s competitive wholesale electric markets, causing severe financial harm to other, more reliable clean energy sources,” Paul Elsberg, a spokesman for Exelon told The Fiscal Times.
Advocates say the wind subsidy creates a level playing field with other forms of energy. The nuclear industry receives financial subsidies from a different federal policy – the Price-Anderson Act – which limits utility liability in the case of a nuclear accident and reduces the industry’s insurance costs. And Congress continues to refuse to eliminate fossil fuel subsidies.
And as the Green Scissors campaign points out, oil, coal, gas and nuclear industries receive over three-quarters of all energy subsidies and allowances, about $300 billion a year.
Earlier this month, 64 conservative groups, led by Koch brothers-backed Americans for Prosperity, sent a letter to both houses of Congress, asking for them to let the wind PTC expire.
Now, 47 Republicans added to the chorus in their September 21 letter to House Speaker Boehner urging the same.
"The Obama administration has poured billions of dollars into subsidizing its favored "green energy" sources. The Solyndra scandal and the administration’s squandering of $535 million in taxpayer dollars is a clear example of this agenda.
"Under this administration, federal subsidies for wind have grown from $476 million per year when the President took office to $4.98 billion per year today. However, wind remains an intermittent resource; the wind does not blow all the time, and wind farms do not produce power constantly the way traditional power plants do."
The letter says a one-year extension would cost $12 billion, and that America cannot afford to subsidized the "operations of a politically preferred technology."
Their argument neglects to mention that wind power added one-third of all the new grid electricity capacity in 2011.
19 leading businesses, including Starbucks, Ben & Jerry’s, Johnson & Johnson and Levi Strauss also sent a letter expressing strong support for renewing the PTC.
At this point, the wind PTC renewal won’t be considered until after the US election in November. Mitt Romney is opposed to the extension, while President Obama favors a balance energy mix that includes wind.
Here’s the Republican letter to Speaker Boehner: