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Treasury nominee supports phaseout of tax credits for wind, testimony shows

The Trump administration's nominee for Treasury Secretary Steven Mnuchin agreed that certain subsidies for renewable energy should be smoothly phased out, as established by Congress.

Mnuchin spoke in support of the phase out of production tax credits for wind energy by 2020 as part of any tax reform proposal when asked about the matter by Sen. Charles Grassley, R-Iowa, at a confirmation hearing.

In a question and answer exchange with Mnuchin, Grassley noted that Congress "effectively put in place transition rules for some alternative energy," including wind. "Based on our conversation, I believe we are in agreement that you would support the current phaseout as part of any tax reform proposal," Grassley said.

According to the American Wind Energy Association, or AWEA, Grassley was seeking to clarify a response Mnuchin gave on the subject at meeting that took place before the hearing.

Mnuchin confirmed his position on the issue, stating that he "absolutely agreed" with Grassley and that phaseout rules are necessary when policies are changed.

Grassley, in a news release, pointed to the exchange with Mnuchin and maintained that a "smooth transition and the certainty of the phase-out are necessary for a fast-growing industry that supports numerous jobs in Iowa and elsewhere around the country." It is important that the wind industry sustains its growth even during the tax credit's phase out, Grassley added.

The AWEA, in a blog post, maintained that "stable investment policy is critical to continue growing wind energy and the number of well-paying jobs it supports." It added that "capacity over the next six years could result in $60 billion in new investment to the U.S. economy, based on an average of wind deployment estimates" from several consulting groups.

Additionally, the group cited a U.S. Department of Energy statistic that wind power supports more than 100,000 domestic jobs and that keeping the tax credits in place would help create another 130,000 jobs within the next four years.

Grassley has defended the wind industry in the past, stating that individual energy policies should only be changed as part of comprehensive tax reform, when all "special-interest provisions" are up for consideration. In December 2016, Senate Majority Leader Mitch McConnell said his chamber would pursue tax reform through budget reconciliation, an expedited process that carries heightened risks for the renewable energy industry.

The fear is that Republican lawmakers would do away with the production and investment tax credits for wind and solar development as part of a broader effort to lower the corporate tax rate and eliminate what the House Ways and Means Committee has described as "special interest carve-outs."