A government tax-incentive subsidy that has led to a spike in wind energy production in Kansas is set to expire in December unless Congress acts.

On Monday, Gov. Kathleen Sebelius and Lt. Gov. Mark Parkinson sent a letter to Kansas’ congressional delegation and to leaders in the House and Senate lobbying for at least a three-year renewal of so-called energy production tax credits.

“Extending the PTC for at least three years will allow manufacturers and developers time to plan, which will benefit our statewide growth in wind,” Sebelius and Parkinson wrote.

If history is a guide, expiration of the tax credit would have a chilling effect on the development of wind energy.

Kimberly Gencur-Svaty, a spokesperson for Johnson County-based TradeWind Energy, said the tax credit has been allowed to expire several times in the past.

Each time, she said, development of wind energy has hit a “lull.” In fact, when the tax credits were last allowed to expire in 2004, investment in wind energy projects fell by 77 percent the following year, according to the American Wind Energy Association.

According to the wind energy association, a recent study by Navigant Consulting estimated that expiration of the wind energy tax credit would cost 116,000 jobs nationally, and more than $19 billion in investments in wind and solar projects.

When the tax credit has been renewed, Gencur-Svaty said, “there’s been a corresponding spike in wind development activity.”

She said wind energy producers in Kansas and throughout the nation were currently rushing to get projects on line, prior to the possible expiration of the program.

She said wind energy producers would prefer at least a five-year extension of the tax credits, though any renewal would be appreciated.

“We would certainly like to see more certainty and stability in the marketplace,” she said.

A lengthy renewal would at least partly level out the lulls and spikes in activity that have been associated with the tax credits, she said. The current production tax credit that is facing expiration provides a 1.9-cent credit for every kilowatt hour produced.

During a bi-partisan energy summit hosted by the U.S. Senate on Friday, Daniel Yergin, chairman of Cambridge Energy Research Associates, said, "An on-again, off-again production tax credit is not a way to promote stable development of renewable energy."

Gencur-Svaty said TradeWind CEO Rob Freeman would be traveling to Washington, D.C., this week to lobby lawmakers on renewing the tax credit.

Gencur-Svaty said the U.S. House has generally been friendlier to the tax credit subsidy than the Senate. However, both Sen. Sam Brownback and Sen. Pat Roberts have been supporters of the tax credit program in the past.

Sarah Little, a spokesperson for Roberts, said the senator supports tax incentives for wind energy, both as a way to generate additional electricity and as a means to stimulate economic development in Kansas.

She said there was still a lot of uncertainty in Washington, D.C., on precisely what lawmakers might be voting on.

If the Senate were to vote up or down on a stand-alone piece of legislation strictly on tax credits on wind energy, she said Roberts would be on board. In fact, she said Roberts once sponsored a bill strictly on production tax credits that passed the Senate 88-0. That measure did not survive a conference committee consisting of House and Senate members, however.

It’s more likely, Little said, that production tax credits will be packaged in a larger bill that might address issues such as off-shore drilling, drilling in ANWR, and possibly, the lifting of tax credits for the oil and gas industry.

It’s also possible the measure could become part of a larger bill that would include other tax incentive programs.

She said it’s impossible to say with certainty how Roberts will vote on any bill until the entire content is mapped out.

“At this point, it’s a moving target,” she said.

- Phil Lacerte

• Resource: Read the governor's letter here.

The Week in Review