(Reuters) - The U.S wind energy industry on Friday cheered a Senate tax proposal that, unlike the House version unveiled last week, preserves the tax credit that helps wind farms compete with plants fired by fossil fuels.
The Senate plan brought relief to an industry that has spent the last week warning lawmakers on Capitol Hill that changes to the credit would put $50 billion in planned investment at risk.
However, if the House and Senate pass their differing proposals on the Republicans’ broad tax-cut plan, a House-Senate committee will need to reconcile the differences and both chambers will have to approve the resulting compromise legislation, so it is too soon to know if the tax overhaul will ultimately preserve the wind energy credit.
MidAmerican Energy said on Thursday that if the bill passed as the House proposed, the Berkshire Hathaway Inc (BRKa.N) unit could be forced to cancel $4.3 billion of wind investments in Iowa, affecting 400 jobs and prompting the loss of $10 million a year in property tax and landowner payments.
The wind industry’s production tax credit was extended by Congress in 2015 and awards a credit for every kilowatt-hour of energy produced from wind projects. Investors and project developers had banked on the stability of the policy, which is scheduled to phase out by 2020, in planning their investments.
“The Senate tax reform bill keeps a promise to America’s more than 100,000 wind energy workers and restores the confidence of businesses pouring billions of dollars into rural America,” Tom Kiernan, Chief Executive of the American Wind Energy Association trade group said in a statement.
Republican Senators Chuck Grassley of Iowa, John Thune of South Dakota and Dean Heller of Nevada and others were opposed to changes in the tax credit, the AWEA said.
Reporting by Nichola Groom; Editing by Frances Kerry