At issue on Wednesday was a vote on legislation to end $18 billion in tax breaks for the five largest oil companies and use the proceeds to extend tax incentives for wind, solar and other renewable sources of energy that otherwise will expire soon.
The cost of the legislation n which passed the House 236-182 n to oil companies would be $1.8 billion a year for 10 years. With oil prices soaring, ExxonMobil alone made $40.6 billion in profit last year.
Among the tax incentives for renewable energy in the legislation are the 2 cents per kilowatt production tax credit for wind, and a 30 percent investment tax credit for commercial and residential solar projects. The current $2,000 income tax credit for homeowners who install solar would be doubled to $4,000.
Incentives for investment in renewable energy are central to reducing America’s costly and dangerous dependence on imported oil and fossil fuels in general. Energy markets can be volatile, creating uncertainty for investors. Tax incentives are a proven way to mitigate the risks. The existing tax credits set to expire this year have helped stimulate a surge of investment in renewable energy. Extending these incentives would send an important signal to the market that the United States is committed to diversifying its energy supplies.
But the wisdom of continuing to spur the quickening growth of renewable energy n the wind energy sector has grown 22 percent a year over the past five years n was lost on 17 out of the 28 House members from the Rocky Mountain states. Unfortunately, the divide came along party lines.
Given the potential in the West for renewable energy, and the parade of wind and solar development projects marching through the region, that head-in-the-sand outlook is puzzling. Five of our states rank in the top 20 in the nation for wind energy potential, according to an assessment Pacific Northwest Laboratory conducted for the U.S. Department of Energy. Montana is fifth in the nation and tops in the Rocky Mountain West for its wind potential.
Despite that bright future, Montana’s Rehberg, Colorado’s Marilyn Musgrave, and Arizona’s Rick Renzi, Trent Franks, John Shadegg and Jeff Flake voted against the bill. In Musgrave’s district, a new $60 million wind turbine manufacturing facility will employ 650 workers. Here in Montana, a Spanish company recently announced it would double the size of a wind farm near Cut Bank, making it at 300 megawatts the largest wind project in Montana. The Arizona lawmakers voted against the bill less than a week after Arizona Public Service Co. announced plans for construction of one of the world’s largest concentrating solar facilities n a 280 megawatt plant southwest of Phoenix.
Projects like those represent the West’s energy future, and western lawmakers need to start looking forward instead of backward.
Tom Kenworthy is a senior fellow at Western Progress, a regional policy institute with offices in Missoula, Denver and Phoenix.
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