Gov. Mike Beebe Slams Congress as Nordex Stops Production

by Luke Jones  on Friday, Jun. 28, 2013 11:18 am  

"I'm so fed up with Congress," Mike Beebe said on Friday. (Photo by Mike Pirnique)

Production at Nordex USA in Jonesboro might have continued if Congress had put more power into a federal tax credit for wind companies, Gov. Mike Beebe told Arkansas Business on Friday.

"I'm so fed up with Congress," Beebe said. "Arkansas went out of its way to bring these companies in."

Beebe, interviewed after an event at the Mosaic Templars Cultural Center in Little Rock, was reacting to Nordex's announcment early Friday that it would end production at its Jonesboro facility by the fall, leaving 40 people out of work. The plant employs 50.

In its announcement, Nordex's CEO cited "unpredictable extensions of the Production Tax Credit (PTC), and the resulting low utilization rate of our US assembly plant." 

The tax credit let companies producing renewable energy pay an income tax rate that was 2.2 cents lower per kilowatt-hour. After months of waffling last year, Congress in January renewed the credit for a single year.

Beebe said companies can't be expected to invest in the state when their tax rate is only guaranteed for a year, a tenet that he said he's been "preaching for a long time."

The American Wind Energy Association echoed Beebe's feeling that Congress needs to pump up the incentive.

"Wind power has been good for Arkansas consumers and businesses, and wind power could do a lot more for the state if we had predictable national policies to create a stable business environment," Rob Gramlich, AWEA's senior vice president for public policy, said in a statement. "That starts by keeping the federal production tax credit in place to allow wind energy to scale up as rapidly as it can. Nordex said uncertainty is one of the main reasons for their business decision to cease building wind turbine nacelles in Jonesboro.
 
"Arkansas has positioned itself to take advantage of the wind industry's growth in the region, which is providing low-cost electricity in Arkansas and exporting energy east. And consumers are saving, because wind power holds down the overall cost of electricity on fixed-price contracts. But predictable policies to create a stable business environment are critical, especially if we want to maintain this new U.S. manufacturing sector and tens of thousands of good-paying jobs. That will take action by Congress."
Despite supporting a temporary extension of the tax credit, U.S. Rep. Tim Griffin, R-Ark., said he "just couldn't vote" for the fiscal cliff legislative package that contained it. On Friday, he took issue with Beebe's comments.

"Nordex’s decision to close its plant is disappointing and my heart goes out to those affected, but blaming Congress, while convenient, is also misguided: The House is working on bipartisan tax reform to produce a simpler, fairer pro-growth tax code so we can stop jobs from moving overseas," Griffin said in a statement to Arkansas Business.

"Also, the wind industry’s tax credit that has been in place since 1992 – more than 20 years – was extended in January, and the industry supports phasing it out. Ultimately, Nordex's decision underscores the pain American workers are feeling as a result of failed policies."

U.S. Rep. Rick Crawford, R-Ark., who represents Jonesboro in the 1st District, supports a long-term extension of the production tax credit. But he added that the national debt is at the heart of the issue.

"The Nordex announcement is another wake-up call for Congress to take action instead of dawdling. Our nation is in a huge financial mess due to decades of borrow-and-spend policies implemented by both political parties, which make it extremely difficult to provide certainty for most sectors of our economy including energy, agriculture, health care, and small businesses," Crawford said.

"The $17 trillion debt, which is growing by roughly $600 billion annually, is now larger than our entire economy and, left unaddressed, will result in much higher taxes for industry, farmers, small businesses and certainly middle-class families and we’ll see even greater job losses as a result. This is why it is vital that Congress address the debt crisis."

 

 

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