Investors Ask Congress to Extend Wind Production Tax Credit
BOSTON, Oct. 24 /CSRwire/ - Two dozen investors with more than $800 billion in assets under management today called for an immediate extension of the Production Tax Credit (PTC) for renewable power. In a letter delivered to Congressional leaders, investors noted that this critical tax credit creates broad economic benefits, both for wind power producers and their suppliers across the nation. Several of these investors will meet with Congressional staff tomorrow to discuss their support for the credit.
First passed by President George H. W. Bush in 1992, the PTC provides a tax credit of 2.2 cents for each kilowatt-hour of renewable power generated. The credit is designed to stimulate investment in renewable energy and has specifically helped the wind power industry to build up a large domestic network of suppliers. According to the American Wind Energy Association, the PTC has spurred $20 billion in private investment and the creation of 75,000 jobs. Investors wrote to encourage Congress to extend the credit before it expires at the end of 2012.
“It is not just investors in wind turbine manufacturing or builders of wind farms that care about the Production Tax Credit. This measure supports the broader renewable power economy,” saidMatthew Patsky, CEO of Trillium Asset Management. “We have long-term positions in a variety of suppliers and diversified firms that can link a portion of their success to the wind power industry. We want to see that progress continue without being bogged down by uncertainty in Washington."
The signatories of the letter, many of whom are members of the Investor Network on Climate Risk, include state treasurers and several of the largest pension funds in the country including the California State Teachers Retirement System, the New York State Comptroller’s Office, the New York City Comptroller’s Office, and the North Carolina, Pennsylvania and Oregon State Treasurers.
“The Production Tax Credit is vital to fostering a vibrant renewable power sector, which will improve our economic competitiveness while also reducing our reliance on fossil fuels,” saidOregon State Treasurer Ted Wheeler, who oversees the management of $72.5 billion of state funds. “Renewable energy generation opportunities beckon from border-to-border in Oregon, and they promise to produce not only clean and sustainable power but also crucial employment and investments in key infrastructure.”
Oregon wind farms now generate enough energy to power 700,000 homes, and the state is the home to the North American headquarters of wind power companies Vestas and Iberdrola Renewables.
“Instead of threatening tens of thousands of wind power jobs, Congress should heed these investors’ call and craft long-term policy that supports renewable energy and its workforce,” saidMindy Lubber, director of the Investor Network on Climate Risk and president of Ceres. “For long-term infrastructure projects like upgrading our electricity grid, ‘boom and bust’ cycles just don’t work.”
“As long-term investors, we recognize America’s critical need for more sustainable energy sources,” said New York City Comptroller John C. Liu, who oversees the city’s $122 billion pension fund. “But given our fiduciary duty to provide a secure retirement for 700,000 hardworking New Yorkers, we need a stable policy on incentives in order to invest in the renewable power industry. This credit pays for performance in the renewable power sector, and it deserves to be extended as soon as possible.”
Over the past five years, wind power has accounted for 35 percent of newly installed electricity generation capacity in the United States. Bolstered by the PTC, production costs for wind power are down over 90 percent since 1980. However, each time the PTC has been allowed to expire, annual wind capacity installations have fallen at least 73 percent in the following year. Investors are encouraging Congress to avoid such an outcome by extending the tax credit as soon as possible.
Ceres is a nonprofit group advocating for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate adoption of sustainable business practices that will build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion. For more information, visit http://www.ceres.org and http://www.incr.com.