AUSTIN — Texas hit a milestone in October when wind-generation capacity for the first time exceeded installed coal-fired generation capacity, but proposed tax-cut changes could slow that momentum.

The U.S. House of Representatives recently approved legislation changing the way wind companies qualify for key production and investment tax credits.

Instead of preserving an existing agreement that phases out the credits after 2020, the House bill applies them retroactively.

“The House tax bill, far from being pro-business, would kill over half of new wind farms planned in the U.S. and undermine one of the country’s fastest growing jobs,” Tom Kiernan, CEO of the American Wind Energy Association said in a statement. “Congress must act immediately in conference ... to restore the confidence of businesses ready to pour billions of dollars into job-creating American infrastructure.”

The Texas wind industry supported upwards of 22,000 direct and indirect jobs and accounted for annual lease payments to landowners of more than $60 million in 2016, according to AWEA.

David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis, said the coal industry stands to gain under the proposals.

“Clearly, [former President Barack] Obama wouldn’t have supported this,” Schlissel said. “It’s really unfortunate.

“Wind and solar are growing around the nation: big time in Texas, and up to the Dakotas.”

The American Council on Renewable Energy on Wednesday submitted a letter to the Senate regarding its Tax Cuts and Jobs Act.

“Renewable tax credits, which are already phasing down, would be subject to a new 100 percent tax under the Senate bill, while the array of tax benefits for fossil fuels, in some cases more than 100 years old, remain untouched,” said Gregory Wetstone, ACORE’s chief executive officer. “If this bill passes as drafted major financial institutions would no longer participate in tax equity financing, which is the principal mechanism for monetizing credits.

“Almost overnight, you would see a devastating reduction in wind and solar energy investment and development.”

Under the current rules, wind energy is not just on coal but also nuclear power in Texas.

In 2016, the generation that Texas gets from wind farms exceeded the amount of energy from nuclear for the first time, according to the Electric Reliability Council of Texas.

Although Republican lawmakers are supporting the proposed tax changes, rural areas in conservative states such as Texas could be among the big losers if the changes are adopted.

Jeff Clark heads The Wind Coalition, a trade association of wind-energy developers, manufacturers and customers.

Clark said the proposals “paint a target” on rural areas where wind-farms help boost local tax bases and support land owners hit by drought and falling commodity prices.

He fears the rule changes would affect not only future investments but make also make a retroactive impact on projects that are already underway.

“They’re changing the rules in the fourth quarter,” Clark said. “There’s no way for our investors to go back in time and re-qualify.”

The estimated national job loss in wind-related construction and manufacturing is estimated at about 60,000 if the proposals are adopted.

“This could mean less investment in infrastructure in the United States,” Schlissel said. “It’s backwards.”

The Senate version of the tax bill until this week preserved the credits that have helped power wind-industry growth.

A last-minute change, “keeps the credits alive, but eliminates their value,” Wetstone was quoted as saying in a report published on Thursday by Utility Dive.

On Thursday, Arizona Republican John McCain, who has been uncommitted, said he would support the GOP Senate tax plan.

“After careful thought and consideration, I have decided to support the Senate tax reform bill,” McCain said in a statement. “I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families.”

John Austin covers the Texas Statehouse for CNHI LLC’s newspapers and websites. Reach him at jaustin@cnhi.com.

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