Wind association drops utility over tax incentive

A major wind industry group cut a utility with White House ties from its coalition because of the firm’s opposition to a crucial tax incentive, a spokesman with the utility acknowledged Monday.

The American Wind Energy Association (AWEA) dropped Chicago-based Exelon on Friday because of the utility’s resistance to extending the wind production tax credit. That incentive, which credits wind power producers 2.2 cents per kilowatt-hour, is slated to end Dec. 31.

David Brown, senior vice president of federal government affairs and public policy with Exelon, told reporters Monday that Exelon had been “fairly consistent” with its position against subsidies. He said the recent stance against the wind incentive was the first time Exelon went on record about that specific issue.

“It’s not a political alignment — it’s a shareholder alignment, a customer alignment and an employee alignment,” Brown said in response to a question from The Hill. “Sometimes we’re aligned with certain parties, and sometimes we’re not.”

Exelon’s opposition to the wind tax incentive illustrates a divide in what has been a fairly strong relationship between the utility and the Obama administration. The president supports extending the incentive and has pushed it as a jobs issue in swing states such as Iowa and Colorado.

GOP presidential candidate Mitt Romney, on the other hand, would let the incentive end as scheduled. He said the federal government should not assist energy technologies that could not survive in the marketplace without federal backing.

Brown said the PTC is helping wind cut into its nuclear power business. Though the utility has 900 megawatts of installed wind electricity generation capacity, he said wind is “distorting competitive markets that we operate in" by lowering the wholesale price of electricity.

He said the firm believes individual state renewable energy standards will promote sufficient wind installations absent the incentive.

“In terms of looking at new build, what we’ve said is we’ve long had a position against subsidies, the wind PTC has run its course, it successfully launched the industry,” Brown said.

Exelon has had more consistent communication with the White House than other utilities, as Obama has ties with the company since his days in the Illinois state legislature. The administration said the relationship is based on a shared vision for the nation’s energy future, according to a New York Times story published in August.

But that vision might diverge on the wind incentive that’s popular with the president.

The administration has touted an Energy Department report that shares wind industry estimates that letting the incentive die would kill 37,000 direct and indirect jobs. Preserving the incentive would maintain 75,000 jobs, the report said.

The incentive has passed the Senate Finance Committee in a $205 billion tax extenders package. Senate Majority Leader Harry Reid (D-Nev.) has said he is “very confident” it will pass the full Senate this year.

When asked about what he thought of the incentive’s chance of passing, Brown said, “We’ll just have to wait and see, and that’s why we’re playing the game.”

The Hill was checking with the administration for a response when this story was published.