Renewable Energy Production Tax Credits

Production tax credits are set by Congress under a bill that was passed as part of
the Energy Policy Act of 1992 and expanded under the Energy Policy Act of
2005. The Production Tax Credit (PTC) was for 1.5 cents per kWh adjusted for
inflation. The PTC expired on December 31, 2001. It was extended for 2 more
years; expired and extended again in 2005, and is now scheduled to expire on
December 31, 2007.

The Production Tax Credit law has two major flaws: The frequent expirations and extensions of the tax credit create a boom and bust cycle for investments in renewables and, as currently written, the law doesn't allow Native American tribes nor their joint venture partners to use the tax credits. This unfairly penalizes some of America's poorest people and stifles development of wind and solar projects on some of the most promising lands in the country.

Congress is again debating the tax credit, and recently the governors of eleven western states unanimously approved a resolution urging Congress to extend the PTC for ten years and make it available to Native American tribes through a Tribal Energy Production Incentive (TEPI).

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