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Don’t target wind energy

By Staff | Aug 17, 2012

Making use of wind to generate electricity has enormous implications for the United States. The goal of generating 20 percent of the nation’s electricity from wind power by 2030 appears highly achievable.

Turning wind power into electric power is already a reality in many parts of our nation. In 2011, according to data from the U.S. Energy Information Administration, 3 percent of U.S. electricity was produced from wind turbines and that capacity is increasing rapidly. The USEIA put the nationwide increase in energy generated from wind during 2011 at 27 percent.

Iowa is a national leader in this regard. In 2010, 15.4 percent of the Hawkeye State’s electricity was wind-generated. Iowa was the first state to produce in excess of 15 percent of its electrical power from wind. That already-impressive statistic has now grown to 20 percent and further development is under way.

Clearly, Iowa is showing other states how to make this new energy source viable. Energy can be produced in perpetuity from the gentle winds that blow across our fields.

Sen. Charles Grassley has been a strong supporter of the wind-energy industry as it has evolved. The Iowa Republican authored the legislation that created the wind-energy production tax credit in 1992 and has worked aggressively to keep it a part of the federal tax code for two decades. He is currently working hard to make sure that it remains in effect at least through Dec. 31, 2013.

Conservative critics of this tax credit contend it is one of many provisions of the tax code that distort the marketplace. They argue that the tax code should not favor some industries over others and advocate letting the wind-energy credit expire this year.

The marketplace is the proper venue to determine which industries and technologies prosper. Unfortunately, the current tax system in the United States massively distorts competition by including thousands of pages of special provisions that favor some enterprises over others. That should change.

Reforming the federal tax system to modify – or possibly eliminate – the numerous provisions that have been inserted by lobbyists and interest groups to benefit particular industries is a worthy goal. This should only happen, however, as part of a comprehensive overhaul of the tax code. Targeting the wind-energy tax credit at this time while other types of energy producers retain their special tax advantages would be unfair and would hurt an important Iowa industry.

That is an argument Grassley has made forcefully in the current debate on Capitol Hill about extending the wind-energy production tax credit.

“No single energy tax incentive should be singled out over others, energy-related and not, before a broad-based tax reform debate,” Grassley said in a memorandum released by his office early this month. “Congress and the President need to take up tax reform to make American business more competitive with lower rates, a broader tax base and a simpler code. Until tax reform is undertaken, workers and employers need certainty in existing tax law.”

Farm News agrees with Grassley. The wind-energy production tax credit should be renewed pending a much-needed, comprehensive rethinking of the tax code.

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