In one of its last actions for the year, Congress passed a bill extending a variety of tax breaks, including the Production Tax Credit (PTC) through the end of 2014.
The PTC, along with many other tax breaks in the bill, had expired at the end of 2013. The extension will allow them to be claimed on 2014 tax returns, but leaves them in limbo for next year. Supporters had sought a longer extension, but disagreements over various provisions and a veto threat from President Obama—unrelated to the PTC—killed changes for a longer extension.
The PTC, first enacted in 1992 and modified in 2005, provides a credit on generation for the first ten years of a facility’s operation. Despite drawing substantial controversy, especially over the past few years, it has been extended every time it has previously expired or neared expiration.
Congressional leaders indicated that negotiations on a longer extension would occur when the new Congress convenes in January, but with the shift in control of the Senate to the GOP, the PTC’s prospects are uncertain.
The American Wind Energy Association (AWEA) praised the extension but lamented that it would expire again in less than two weeks. The group had previously called an extension to the end of 2014 “essentially worthless.” Said Michael Goggin, AWEA’s director of research, “There’s simply not enough time for any substantial number of new projects to physically begin construction before the end of the year.”
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).