MidAmerican Energy said Thursday a plan to scale back the federal wind production tax credit would remove the certainty the company has been counting on in its plans to expand wind power in Iowa.
The wind provision, included in the Republican tax plan in the U.S. House, would scale back the credit by limiting it to 1.5 cents per kilowatt-hour of electricity, down from 2.3 cents. The House Ways and Means Committee cleared the tax plan Thursday.
A Senate tax plan was scheduled to be released on Thursday, and some lawmakers on the Finance Committee have said it won't appear in that version, according to a report. But if the House provision were to prevail, it would put in jeopardy $50 billion in planned investments, according to the American Wind Energy Association, an industry group.
Wind advocates complain the House changes would also reverse a 2015 agreement in Congress to phase out the production tax credit over five years.
In a statement, MidAmerican said the agreement provided certainty for near term investments. "The House proposal removes that certainty, which MidAmerican Energy — and its customers — were counting on when it moved forward with plans to rebuild and repower more wind generation," the company said.
In 2016, MidAmerican announced plans to add 2,000 megawatts of wind generation in the state, a $3.6 billion project.
The House tax bill cuts corporate taxes from 35 percent to 20 percent, reduces the number of income tax brackets, increases the standard deduction and rids the tax code of a range of tax breaks, among other changes.
The provision affecting the wind industry, along with other renewable energy sources, would add about $12.3 billion to government revenues over 10 years. The provision would offset revenue losses in other parts of the tax plan.
A Congressional Budget Office report said this week the plan would add $1.7 trillion to the deficit over a 10-year period.
Republicans have argued the tax plan will lead to greater economic growth, but the study did not measure that potential impact.
Democrats have complained the plan is a giveaway to corporations and the wealthy.
The Senate tax plan, which was to be released on Thursday, was not expected to include the wind provision. Bloomberg reported this week that some Republican members of the Senate Finance Committee had taken a dim view of the idea.
On a conference call with Iowa reporters on Wednesday, Sen. Chuck Grassley, R-Iowa, a member of the committee, noted the agreement in Congress to phase out the tax credit, adding "these are things that shouldn't be messed with in a tax reform bill."