Support production tax credit for renewable energy
I am writing in support of the production tax credit for renewable energy production. The credit is made available for the production energy from wind, biomass, hydroelectric and other renewable sources. The current credit is 2.2 cents per kilowatt actually produced, for the first 10 years of production.
Prior to the explosion in gas exploration and development, the PTC, coupled with rising fuel prices, led to significant growth in wind energy production. This created industry growth in the U.S. that translated into new and high paying jobs.
My purpose in writing is not to engage in a debate about global warming. While it is certainly worthy of our consideration and further discussion, for the moment I want to focus on some dollars and cents reasons that justify extension of the PTC:
First, recognize that this credit is available only when energy is produced. Why is this noteworthy? It is important because the risk is borne by the builder and not the government (taxpayers). These credits are applicable only when the facility is built, connected to the grid and producing energy. This compares favorably with other important investments we make in infrastructure at the development stage that have greater risk.
Risk as it applies to our energy facilities comes in several important flavors. The first one we should keep account of is our national security. To the greatest extent possible we should be encouraging all forms of responsible domestic energy development, particularly when it is clean.
The cost of being an energy (particularly oil and gas) customer in the current state of the world is substantial – none of us need a reminder of the considerable military costs we have borne of late to protect our oil and gas supply. This is rarely counted in the equation of our comprehensive energy costs – but it should be. Domestic renewable energy should absolutely be part of our independence. Our energy independence is a manifestation of self-reliance. This is not a Democratic or Republican value – it is an American value.
What about cheap and plentiful gas, though? Why spend the money on renewable energy if we are not talking about global warming? As with any investment, diversification leads to long-term stability and predictability in result(s). We know not to put all our financial eggs in one basket – we should apply the same principles to energy production.
Remember that utility scale energy projects are developed for a very long time horizon. With that kind of time horizon in mind, we need to appreciate that renewable sources of energy come without the need to purchase fuel. This demands particular emphasis, so let me say that again – it means no fuel costs. This is obviously significant if we are taking the long view. Though the credit lasts for 10 years, these projects will be a part of our grid and producing energy (without the need to buy fuel) for many decades. In the end, this will save us (and our children) a lot of money.
We should choose a path towards American energy independence. Period. And as part of that independence we need to increase our renewable energy production and capture the concrete attendant economic benefits that come with that investment. The icing on the cake is that we will be advancing a safe, clean and healthy future for our children.
I encourage you to ask your elected officials at all levels, and especially in Congress, to move us down that path and support the production tax credit.
Carl Borgquist lives in Bozeman and runs a utility scale energy infrastructure development company and is a lawyer and former military prosecutor.