In all the New Year's Day wrangling over the final fiscal cliff legislation, there were two clear winners beyond middle-class taxpayers -- the wind and biofuels lobbies.
But the work to keep their tax credits is just beginning. Passage of the bill late Tuesday only re-set the clock for another year, one in which every special interest tax break will face possible elimination in a push to cut federal red ink.
That's not to take away the victory the wind and biofuels groups scored by getting their tax breaks included in the fiscal cliff bill as part of the Senate Finance Committee's $205 billion package of extensions for tax breaks that expired on Dec. 31.
The "extenders" were clearly not a significant cause for heartburn in the Senate, which passed the bill by an overwhelming 89-8 vote, nor in the House. Republicans in that chamber initially balked at taking up the Senate bill, but not because of those tax breaks -- rather, over the lack of more ambitious spending cuts.
But in the end, the legislation rolled through. Notably, it passed over the objections of some conservatives who had tried in recent weeks to kill the wind tax credit, which they and nuclear powerhouse Exelon Corp. argued has distorted regional electricity markets.
With powerful Republicans like Sen. Chuck Grassley of Iowa and Sen. John Thune of South Dakota backing the wind tax break, the critics got little traction. Ironically, Grassley was one of five Republican senators to vote against passage of the bill early Tuesday morning, while his Iowa colleague Sen. Tom Harkin was one of three Democrats to vote no.
The renewable energy Production Tax Credit extension was actually a double win for the wind industry. It not only continued through 2013 the 2.2 cents per kilowatt hour credit for energy produced by new projects for 10 years, but also was amended to apply to projects that begin construction in 2013.
The bill also included tax credit extensions through 2013 for home energy efficiency improvements, for alternative fuel vehicle fueling stations, and for cellulosic biofuels, biodiesel and renewable diesel production.
Lastly, the law allows alternative energy developers to take a one-year investment tax credit equal to the production tax credit, which is expected to help offshore wind development, biomass, geothermal and other projects that benefit from a larger up-front tax break.
Yet the reprieve for all these groups is just that -- a 12-month stay in which more so-called cliffs over the national debt ceiling and federal spending arrive in just a few weeks. Resolving those fights between President Barack Obama and congressional Republicans could lead to a tax code rewrite that closes tax incentives for renewable and fossil fuel production alike.
The American Wind Energy Association was already looking ahead in December when it said a six-year phaseout of the PTC would ensure a long-lasting domestic wind energy industry.
Expect to see that idea and many others -- including defenses of oil and gas tax breaks by its trade groups -- come to the fore quickly after the fiscal cliff dust settles.
One thing to keep in mind is that President Barack Obama continues to put energy among his top priorities. Late Tuesday, Obama alluded to the renewable energy tax breaks in the fiscal cliff bill, noting that the fiscal cliff bill will continue to give tax credits to companies for "the clean energy jobs they create."
Obama campaigned for re-election on advancing clean energy, and he will be expected to fight for wind and solar energy in the tax talks ahead. He said Tuesday that deficit talks should not detract from other national challenges, including "protecting our planet from the harmful effect of climate change" and increasing domestic energy production.
For now, the renewable energy sector can join the nation in breathing a sigh of relief over the fiscal cliff deal, knowing it got another year with the backing of Obama and members of both parties. More tests of that support are coming soon.