Statements on Introduced Bills and Joint Resolutions S395

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. GRASSLEY (for himself, Mr. BAUCUS, Mr. CONRAD, Mr. CRAPO, Mr. BREAUX, Mr. LEAHY, Mr. HARKIN, Mr. DURBIN, Mr. CRAIG, Mr. JOHNSON, Mr. CHAFEE, Ms. SNOWE, and Mr. KERRY):

S. 395. A bill to amend the Internal Revenue Code of 1986 to provide a 3-year extension of the credit for producing electricity from wind; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, I rise today to introduce important tax legislation on behalf of myself and Senators BAUCUS, CONRAD, CRAPO, BREAUX, LEAHY, HARKIN, DURBIN, CRAIG, JOHNSON, CHAFEE, SNOWE, and KERRY.

This bill, entitled the "Bipartisan Renewable Efficient Energy with Zero Effluent, BREEZE, Act," extends the production tax credit for electricity generated by wind for three years. The current tax credit is set to expire on January 1, 2004.
As the author of the Wind Energy Incentives Act of 1993, I sought to give this alternative energy source the ability to compete against traditional, finite energy sources. I strongly believe that the expansion and development of wind energy must be facilitated by this production tax credit.

Wind, unlike most energy sources, is an efficient and environmentally safe form of energy production. Wind energy makes valuable contributions to maintaining cleaner air and a cleaner environment. Every 10,000 megawatts of wind energy produced in the United States can reduce carbon monoxide emissions by 33 million metric tons by replacing the combustion of fossil fuels.

Since the inception of the wind energy production tax credit in 1993, more than 3,000 megawatts of generating capacity have been put online. This generating capacity powers nearly 900,000 homes.
Just last year, over 400 megawatts of new wind energy capacity was installed, bringing total capacity to more than 4,500 megawatts. Wind energy is currently serving the equivalent of more than 1.3 million average American homes in 27 states across the country.

During the past two decades, the price of wind energy has been reduced more than 80 percent, making it one of the least expensive sources of renewable energy. In order to continue this investment and development in America's energy future, we must extend the production tax credit.

From 1999 to 2001, wind energy capacity in Iowa grew by 33 percent, and while Iowa ranks tenth in the nation in terms of wind energy potential, Iowa currently ranks third nationally in wind development, with over 400 megawatts of generating capacity. Only California and Texas generate more electricity from wind than Iowa. And, the Iowa Department of Natural Resources estimates that Iowa has the potential to produce nearly 5 times its own annual electrical needs through wind power.

Wind energy also produces substantial economic benefits. For each wind turbine, a farmer or rancher can receive more than $2,000 per year for 20 years in direct lease payments. Iowa's major wind farms already pay more than $640,000 per year to landowners.

Equally important, wind energy increases our energy independence, thereby providing the United States with insulation from an oil supply dominated by the Middle East. Our national security is currently threatened by a heavy reliance on oil from abroad.

Unfortunately, due to the structure of the current tax incentive, a significant portion of the electricity industry is unable to take advantage of the credit. Rural electric cooperatives and municipal utilities provide power to nearly 25 percent of the Nation's consumers. To encourage a unified national energy plan, it's only fair to give cooperatives and other not-for-profit utilities the ability to use renewable tax incentives.

REC's and municipal utilities should be given a mechanism to utilize the tax incentives for renewable electricity generation. And, while the legislation I'm introducing today does not address this issue, I look forward to working with my colleagues on the Finance Committee to include such a mechanism in a comprehensive energy tax package.

Extending the wind energy tad credit would allow for even greater expansion and planning stability in the wind energy field. Wind is a domestically produced natural resource, found abundantly across the country. Because wind energy is homegrown, it cannot be controlled by any foreign power.

Wind energy can be harnessed without injury to our environment. Wind is a reliable form of power that is renewable and inextinguishable. This legislation ensures that wind energy does not fall by the wayside as a productive alternative energy source.