White House hopeful on renewal of wind tax credit

U.S. President Barack Obama speaks at a campaign event at Herman Park in Boone, Iowa, August 13, 2012.

WASHINGTON (Reuters) - The White House is hopeful Congress will renew a $12 billion tax credit for wind power production, a senior Obama administration official said, as a government report warned that thousands of U.S. jobs would be lost if the incentive runs out.

"You can expect to see this will be a top priority for the administration," a senior White House official, who spoke on condition of anonymity, told reporters about the so-called Production Tax Credit, or PTC, in a teleconference on the report released Tuesday by the Energy Department.

Because of a history of bipartisan support for the tax break of 2.1 cents per kilowatt hour for the wind power industry, "we remain hopeful we can get this extension across the finish line," the official said. The PTC was passed during the administration of President George H.W. Bush, a Republican.

Earlier this month, the Senate Finance Committee passed a renewal of the tax break, which has been added to a package of measures known as tax extenders.

Renewing the tax break would likely face a tough battle in the Republican-led House of Representatives. After Solyndra and other government-backed alternative energy companies went bankrupt, many fiscally conservative lawmakers in the House have been hesitant to support renewable energy technologies.

The Energy Department report said low prices for natural gas, which competes with wind power, and uncertainty about the renewal of tax incentives for wind, "threatens to dramatically slow new builds in 2013." The 2011 wind market report was released as President Barack Obama campaigns on a three-day bus tour of Iowa, the country's No. 2 wind power production state.

The report said top wind power company Vestas was prepared to make deep job cuts if the credit was not renewed.

The American Wind Energy Association trade group estimates that nearly 27,000 jobs could be lost in 2013 if the credit expires.

Mitt Romney, the Republican candidate for president in the November 6 election, supports letting the credit expire, saying it would level the playing field for energy resources.

Several states that will likely go his way in the election, including Texas, Oklahoma and North Dakota, are also top wind power production states.

(Reporting by Timothy Gardner; Editing by Eric Beech)