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Sen. Chuck Grassley has endorsed Mitt Romney, but that hasn't stopped the Iowa Republican's from taking issue with his party's presidential candidate over federal tax incentives for wind energy.
Grassley, who authored wind energy production tax credits legislation in 1992 as a way to allow the renewable resource to compete on a level playing field against coal-fired and nuclear energy, doesn't see Romney backing down from his plan to eliminate those credits.
According to a Romney spokesman, the former Massachusetts governor “would allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits.”
“Wind energy will thrive wherever it is economically competitive,” the spokesman said.
That position irks Grassley and other Iowa Republicans, including Gov. Terry Branstad.
Although he hasn't talked to Romney about the tax credit that allows wind farms to receive a credit of 2.2 cents per kilowatt-hour of electricity they produce, Grassley believes the presidential hopeful's mind is made up.
“There was a conference call between my staff and his staff on these issues and they didn't seem to be backing down,” Grassley said Aug. 9. “I think he'll stick by it.”
He isn't sure Romney or his staff knows the difference between the wind energy production tax credit and the $535 million the Obama administration provided to Solyndra as part of the federal stimulus program.
Solyndra is a California-based solar panel maker that despite a federal loan guarantee sought bankruptcy and laid off more than 1,000 workers.
“I want him to know that you don't get this tax credit unless you are producing electricity,” Grassley said. “It's not like a not like a grant given to Solyndra and in six or eight months they are bankrupt. This tax credit doesn't operate unless you're actually producing energy.”
Grassley and others say the credit has been a key factor in the development of the wind energy industry – both generation and the manufacture of the various components of the wind turbines that have become a part of the Iowa landscape. The turbines have become a new cash crop for farmers who earn tens of thousands of dollars a year for hosting wind turbines on their property.
The American Wind Energy Association, an industry trade group, says 7,000 wind energy related jobs have been created in Iowa. However, Romney's position and inaction by Congress on extending the tax credit are leading to layoffs in the U.S. wind industry manufacturing sector.
Grassley believes there is support for a phase out of the credit over four or five years. He recently introduced two amendments – a straight two-year extension as well as a one-year extension with provisions more favorable to wind-energy producers.
Grassley doesn't think it's right to single out one energy incentive over others before having a broader tax reform discussion.
Supporters of the credit say it costs the federal government less than the combined tax subsidies for oil, coal and natural gas by a 4-to-1 margin.
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