U.S. Sen. Tom Udall, D-N.M., said he plans to demand an extension of the wind energy production tax credit on the Senate floor Thursday, a tax credit he feels has been instrumental in creating jobs in New Mexico.
On his weekly radio call, Udall pleaded his case for the extension of the tax credit in an attempt to save it before it expires at the end of the year.
“Clean energy innovation is creating jobs in states like New Mexico and we should continue encouraging that growth,” Udall said.
“In New Mexico we have enough wind power either already built or currently under construction to power 200,000 homes,” Udall said.
Wind energy production is significant to eastern New Mexico with upcoming projects including Broadview Wind Farm and Tres Amigas.
Ken Starcher, associate director of training education and outreach at the Alternative Energy Institute at West Texas A&M, says the wind energy tax production credit is based on the amount of production wind turbines make, not the amount the producer spends.
“The value of the production tax credit over 10 years based on production should offset about one-third to one-fourth of the cost of the installation, reducing the tax credit liability,” Starcher said. “(Producers) are getting paid back at the federal level for all the distribution he paid out at the local level.”
Starcher used the San Juan Mesa wind energy farm west of Elida as an example.
“It was $250 million for the installation cost and about one-fourth of that, $60 million, is what they would have distributed to the local area in taxes,” Starcher said.
That same amount over time, would be given back to the producer over a 10-year period, according to Starcher.
Congressman Ben Ray Lujan, D-N.M., joins Udall in his fight to extend the production tax credit for the wind industry and co-sponsored a bipartisan bill to extend this tax credit. He encourages its inclusion in a deal to address the fiscal cliff.
“Investing in wind energy is an essential component of our effort to reduce our dependence on foreign oil and move toward a clean energy economy that creates good jobs in our community,” Lujan said.
U.S. Sen. Jeff Bingaman, D-N.M., already expressed his support for the extension of the tax credit last week on the senate floor when he told Congress wind energy is a vital component of the nation’s energy policy.
Bingaman said if the production tax credit is killed, so will tens of thousands of jobs.
“In fact, most wind-related companies have already begun to lay off employees,” Bingaman said. “Orders for new turbines and gearboxes have fallen off significantly, and new wind installations are expected to decline dramatically in 2013 unless Congress takes action.”
But opponents are calling for the wind industry to stand on its own and Starcher says that will slow production down.
“(The wind energy production tax credit) has been turned off four or five times. During the time its off, it always slows or stalls wind production.” Starcher said.
If the tax credit was killed for good, Starcher says it would stall wind development in all states until regular prices for traditional forms of energy, such as coal and gas, rose 10-15 percent.
Starcher added that not many industries, including traditional forms of energy, are willing to give up their tax support.
New Mexico Sen. Stuart Ingle, R-Portales, says the tax production credit is dire to the wind energy.
He’s not against wind energy, but said people need to be aware that there is a difference in price of (wind) electricity and it’s not cheaper.
Ingle says natural gas is cheaper.