Taxpayers have put out billions in subsidies over the last three years for Barack Obama’s green-energy stimulus program, which has produced such success stories as Solyndra, Beacon Power, and Ener1. But what happens when taxpayers subsidize efforts that actually produce electricity? As people in the Pacific Northwest have discovered, they end up subsidizing green-power generation — and non-generation:
Wind farms in the Pacific Northwest — built with government subsidies and maintained with tax credits for every megawatt produced — are now getting paid to shut down as the federal agency charged with managing the region’s electricity grid says there’s an oversupply of renewable power at certain times of the year.
The problem arose during the late spring and early summer last year. Rapid snow melt filled the Columbia River Basin. The water rushed through the 31 dams run by the Bonneville Power Administration, a federal agency based in Portland, Ore., allowing for peak hydropower generation. At the very same time, the wind howled, leading to maximum wind power production.
Demand could not keep up with supply, so BPA shut down the wind farms for nearly 200 hours over 38 days.
Of course, after BPA shut down the wind farms, they could not collect any revenue for the lost output. Guess who gets to pay for the losses? Hint: It’s the same people who pay extra for the privilege of having wind farms on their grid in the first place:
Now, Bonneville is offering to compensate wind companies for half their lost revenue. The bill could reach up to $50 million a year.
The extra payout means energy users will eventually have to pay more.
“We require taxpayers to subsidize the production of renewable energy, and now we want ratepayers to pay renewable energy companies when they lose money?” asked Todd Myers, director of the Center for the Environment of the Washington Policy Center and author of “Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment.”
Enviros don’t like this solution, either, because they understand how angry it will make consumers in the area. Whose fault is that? BPA points right back to the enviros, claiming that they can’t shut down the hydroelectric generators because doing so will endanger a species of salmon in the area, thanks to overoxygenation of the water that increased dam releases can cause.
Traditionally-fueled generators don’t have these problems. They can decrease or increase production as needed, thanks to not being held hostage to the whims of nature and the demands of enviros. Then again, they don’t get rewarded for non-production with taxpayer subsidies like their renewable counterparts, either. At times, they must feel like they’re in the wrong business … even though they’re the ones doing it right.