[Congressional Record Volume 143, Number 156 (Saturday, November 8, 1997)]
[Senate]
[Pages S12119-S12121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Jeffords, Mr. Murkowski, Mr. 
        Conrad, Mr. Harkin, Mr. Kerrey, Mrs. Feinstein, Mrs. Boxer, and 
        Mr. Johnson):
  S. 1459. A bill to amend the Internal Revenue Code of 1986 to provide 
a 5-year extension of the credit for producing electricity from wind 
and closed-loop biomass; to the Committee on Finance.


                 wind production tax credit legislation

  Mr. GRASSLEY. Mr. President, I rise today to introduce important tax 
legislation for myself, Senator Jeffords, Senator Murkowski, Senator 
Conrad, Senator Kerrey, Senator Harkin, Senator Feinstein, Senator 
Boxer, and Senator Johnson.
  Our legislation extends the production tax credit for energy produced 
from wind. This legislation is similar to that which passed the Senate 
as part of the Senate's tax bill attached to the balanced budget 
reconciliation bill this summer. Unfortunately, it was dropped in 
conference between the House and the Senate, and did not become part of 
the Taxpayer Relief Act of 1997.
  Since the Senate has acted favorably on this wind energy production 
tax credit legislation in the past, I would like to ask Senators to 
consider it again next year. I am introducing it this year because I 
want to make sure that it gets an opportunity for cosponsorship.
  As we all know, our Nation's energy supply is both limited and 
controversial. However, energy produced from

[[Page S12120]]

wind is clean, renewable and homegrown. There is nothing limited or 
controversial about this source of energy, the wind. Americans need 
only to make the necessary investments in order to capture it for 
power.
  Our legislation extends the production tax credit and the focus on 
energy produced from wind through the month of June, 2004. Scientists 
blame excessive carbon dioxide for global warming. The chief sources of 
environmentally dangerous carbon dioxide are emissions from the burning 
of fossil fuels. Obviously, we need other safer sources. Wind energy is 
clean, abundant, and a U.S. resource that produces electricity with 
virtually no carbon dioxide emissions.
  Every 10,000 megawatts of wind energy can reduce carbon dioxide 
emissions by 33 million metric tons. Today, our Nation produces only 
1,700 megawatts of wind energy. However, the American Wind Energy 
Association estimates that U.S. wind capacity can reach 30,000 
megawatts by the year 2010. This is enough electricity to meet the 
needs of 10 million homes, while reducing pollution in every State in 
the Nation.
  Americans naturally find abundant wind in every State in the Union. 
Wind is a homegrown energy. No foreign powers can control our source of 
wind energy. No American soldiers or sailors will ever need to fight in 
foreign wars to protect our supply of wind energy, as they must in the 
case of oil. For example, consider the Persian Gulf war. No 
supertankers will ever crack up in the sea and pollute our beaches 
because of energy produced from wind.
  In short, wind energy is a good investment in the present and the 
future. Our legislation extends the successful wind energy production 
tax credit. It is a very successful way of promoting this source of 
energy. It is a cheap investment with high returns for ourselves, our 
children, our grandchildren and their grandchildren. The Senate needs 
to again pass this important legislation to ensure the wind energy 
production tax credit into the next century. I encourage all of my 
colleagues to cosponsor.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1459

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. 5-YEAR EXTENSION OF CREDIT FOR PRODUCING 
                   ELECTRICITY FROM WIND AND BIOMASS.

       Paragraph (3) of section 45(c) of the Internal Revenue Code 
     of 1986 (defining qualified facility) is amended by striking 
     ``1999'' and inserting ``2004''.

  Mr. JEFFORDS. Madam President, I enthusiastically join my colleagues 
in offering legislation that would allow wind and biomass energy to 
continue to advance as commercially viable renewable energy sources. 
This legislation will allow wind and biomass energy to play a 
competitive role in the growing domestic energy market.
  Through the Energy Policy Act of 1992, Congress established a 
mechanism to increase investments in new or emerging energy 
technologies. In 2 years, this credit will expire. Companies developing 
wind energy, who require a 2-3 year lead time for installing new wind 
machines, were not able to take advantage of the available credit 
before it expired. Congress should extend the credit program to allow 
continued efforts to increase production of electricity from wind and 
biomass.
  To date, significant progress has been made in the development of 
wind energy, and this industry is poised to further increase its 
production capacity. With support from Congress through research and 
development funding and tax credits wind energy has become more 
competitive and the technology has improved in designs and operation. 
Generation costs from wind have dropped from 25 cents per kilowatt hour 
in 1980 to a low of 7 cents per kilowatt hour today for wind power. 
Investments in new technological improvements will further reduce the 
cost of this energy source and will enable the industry to play a key 
role in the new competitive electric utility environment.
  Likewise, biomass energy technologies, which are derived from any 
plant material and some forms of animal waste, are continuously 
improving in performance and cost.
  Madam President, I want to emphasize the importance of using 
renewable energy to meet our growing demand for energy. Renewable 
energy is important for several reasons: First, it does not produce 
harmful, life-threatening pollution; second, it is capable of providing 
ample energy to meet the huge amount of demand that is forecasted; 
third, it increases our energy and economic security; and fourth, since 
more than 2 billion people in the world live without electricity, it 
creates jobs in the United States.
  I thank my colleagues for working with me to extend the credit 
program for producing energy from wind and biomass.
  Mr. CONRAD. Mr. President, I rise today to join Senators Grassley and 
Jeffords as a proud cosponsor of legislation to extend the wind energy 
production tax credit. I want to commend the primary sponsors of this 
legislation for their leadership in developing this bill. The bill we 
are introducing today takes an important next step in encouraging the 
development of this very important source of renewable energy. Wind 
energy offers great promise for putting America on the road to greater 
energy independence and economic prosperity.
  I have been a long-time supporter of developing additional sources of 
renewable energy, particularly energy from wind and crops. In 1993, 
Senator Grassley and I introduced S. 1180, the Wind Energy Incentives 
Act of 1993, to provide additional incentives for developing our wind 
energy resources. My home State of North Dakota has abundant wind 
energy resources, more than any other State. I have often referred to 
North Dakota as the ``Saudi Arabia of wind energy.''
  I strongly support encouraging development of additional sources of 
energy because I am extremely concerned that the United States 
continues to face a serious energy problem. While we do not see the 
long gas lines of the 1970's, today we import more than half the oil we 
use, up from about 30 percent in 1974. While we no longer depend on 
just a few sources for that oil, it remains a dangerous dependence, and 
makes up a significant portion of our trade deficit.
  In 1992, Congress passed and the President signed the Energy Policy 
Act, which took a number of important steps toward developing our own 
energy resources here at home. One provision was the production tax 
credit of 1.5 cents per kilowatt hour for wind energy. This credit is 
meant to reduce the cost of these renewable energy sources to make them 
competitive with conventional energy sources. It is also meant to 
encourage the development of these new resources to the point where 
economies of scale enable them to compete in their own right.
  The wind production tax credit established by the 1992 Energy Policy 
Act is set to expire in just 2 years. However, the financing and 
permitting required for a typical new wind facility requires 2- to 3-
years of lead time. Because the wind production tax credit will expire 
in 2 years without the extension we are introducing today, investment 
funds to develop new wind projects are drying up, unnecessarily halting 
future project planning. Additionally, the cost of wind energy 
production has dropped significantly from its earlier days, and as the 
technology matures the cost will continue to drop.
  I urge my colleagues to join us in taking this step toward energy 
independence by cosponsoring this legislation.
  Mrs. FEINSTEIN. Mr. President, I rise this afternoon to cosponsor 
legislation introduced by my colleagues Senator Grassley and Senator 
Jeffords to extend the production tax credit, a tax incentive to 
encourage wind-generated energy.
  Today, California's Tehachapi-Mojave area is the world's largest 
producer of wind-generated electricity. The New York Times has 
described the area's 5,000 electricity producing wind turbines as a 
vision of the future. Wind generation energy provides a renewable, 
clean, environmentally sound source of energy in California. I am 
pleased to lend my support to the Grassley-Jeffords legislation.
  The production tax credit provides a 1.5 cent tax credit for each 
kilowatt of

[[Page S12121]]

electricity produced in the United States during the first ten years a 
new wind energy production facility is in service. The legislation is 
an inexpensive way to encourage clean, efficient and sustainable energy 
future for our children and grandchildren.
  Under current law, the production tax credit is scheduled to expire 
in 1999, complicating the planning and development of new wind energy 
generation facilities. New wind energy facilities, like any major 
construction project, take several years to move from planning to 
operation. Without the certainty of the credit after 1999, investors 
will be reluctant to commit funds for the development of new wind 
energy facilities. Industry officials have already noticed a decline in 
investment, which can be attributed to the credit's uncertainty.
  Wind energy is the world's fastest growing energy technology. The 
amount of wind-generated power has increased by 25 percent each year 
during the last 5 years, growth which is expected to accelerate through 
2010. Wind-generated energy is expected to become a $400 billion 
industry worldwide by 2020. However, most of the growth is occurring in 
Europe, rather than here in the United States. No new wind power 
generation development has occurred in the United States since 1991.
  I am pleased that California companies, including those in south and 
central California, are among the world's leading manufacturers and 
developers of wind energy facilities. If domestic firms are able to 
capture even one-fourth of the jobs associated with serving the growing 
market, the growth would support approximately 150,000 jobs. These are 
high-technology engineering jobs, traditional areas of strength for 
California, providing a solid economic foundation.
  The Grassley-Jeffords legislation will have important environmental 
consequences as well. The President's initiative against global warming 
includes $5 billion program of tax incentives, which could include the 
extension of the production tax credit. Coal is currently the Nation's 
largest source of power, providing 55 percent of the Nation's energy 
needs. However, coal has the highest level of carbon dioxide, when 
compared with the amount of electricity produced. Wind production 
energy is a significantly cleaner alternative, helping to decrease 
carbon dioxide emissions. Wind energy could supply 30,000 megawatts of 
energy by 2010, rather than current 1,700 megawatts today, reducing 
carbon dioxide emissions by 18%. These are cost-effective steps for our 
energy future.
  I am pleased to join Senator Grassley, who has demonstrated his long-
standing commitment to this important issue, and cosponsor the 
Grassley-Jeffords legislation. Without an extension, I am concerned 
wind energy production will not be able to develop, undermining 
economic, environmental and clean air goals. Wind generation energy 
provides a renewable, clean, environmentally sound source of energy for 
California's future. I am pleased to lend my support to the 
legislation.
                                 ______