Windmill tax break may be extended

A tax break that has helped spur the development of windmill farms in Washington state could be extended for five years as part of the new Senate energy bill, Sen. Maria Cantwell said Wednesday.

But the ability to carry that power from turbines in some of the wind-swept regions of the Northwest to the customers who need it isn't part of the proposal at this time.

Cantwell, D-Wash., discussed portions of the new energy proposal the day after the Senate began consideration of the massive bill that carries some of her key issues. It has a section that would allow the Federal Trade Commission to investigate gasoline companies for price gouging, a provision that has drawn a veto threat from the White House.

The proposal defines price gouging in broad terms that involve manipulation of supply and demand, a Cantwell spokeswoman said, rather than a formula that looks at a certain amount of increase over a set time frame.

Cantwell thinks the price gouging provisions have enough support to pass the Senate, either as part of the overall energy bill or on their own. Whether it should be pulled from the main bill to avoid a veto wouldn't be her decision. "I'll leave that up to Sen. Reid," she said, referring to the Nevada Democrat who serves as majority leader.

The energy bill tries to "jump start" the production of alternative fuels and energy sources, with money for research and tax credits for development. As early as next week, the Senate could take up a proposal by Cantwell and Sen. Gordon Smith, R-Ore., to extend tax credits for new wind and solar energy facilities and may add it later to the main energy bill.

In 2005, Congress approved a tax credit of 1.9 cents per kilowatt-hour, good for the first 10 years of operation and helped create a boom in windmill farms in Central and Eastern Washington. But that tax break is due to expire at the end of the year, and utilities that have erected wind turbines on the Palouse and the Columbia Gorge are pushing for an extension to put up more windmills.

The new proposal would offer an additional five years on the tax credit, under the theory that a long-term extension would be more predictable for utilities considering more turbines, Cantwell said.

But the utilities are also holding off on some new wind projects because some transmission lines in rural areas for the Bonneville Power Administration are near capacity. That's not something the new energy bill tries to address, Cantwell said. Instead, it's a matter of getting BPA to decide to use bonding capacity to upgrade its lines.