Congress once again circling back to the wind production tax credit that refuses to quit
posted at 1:21 pm on May 16, 2014 by Erika Johnsen
We are already well into the fifth month of 2014, and the expired 2.3 cents/kilowatt-hour production tax credit by which the wind industry lives and dies is still just that — expired. While I would call that major progress in learning to let go and suggest that the PTC should stay expired forever, rather than Congress belatedly renewing it as it has after the PTC’s periodic expiration dates over the past two-plus decades, the wind industry’s well-monied lobby is reliably still courting (and I do mean “courting“) that ever-likely possibility. The lobbyists have finally succeeded in getting their goodies back on the mainstream Congressional agenda, with their usual champions workin’ the floor with legislation that would extend the credit for yet another two interminable years as part of a gigantic package of various tax extenders:
The US Senators from Colorado are hoping to salvage a renewal of the wind production tax credit, a policy that is bundled into a bill that stalled on Thursday in a procedural move. …
For them, this is about the four manufacturing plants in Colorado owned by Vestas, which makes wind turbines and employs nearly 2,000 people.
“These are good, American, high-paying jobs,” said Sen. Michael Bennet (D-Colorado,) who approached 9NEWS together with Sen. Mark Udall (D-Colorado) for an interview about the credit. …
The tax credit goes to wind farms for the energy their turbines produce. Wind projects under construction by the end of 2015 would get the credit for ten years.
It’s a big incentive, which leads wind project investors to buy more turbines from Vestas.
“When we’ve let the production tax credit languish, then you have seen this drawback,” said Udall, referencing past layoffs by turbine makers.
Right, which is precisely why we should let the production tax credit languish — i.e., because wind energy is highly dependent on taxpayer largesse (the PTC is a major yet only one of the myriad forms of special treatment that the federal government bestows upon the industry), and it will never be able to compete on its on competitive merits until it is pushed out of the nest and forced to innovate more effectively. Wind energy in the U.S. has lived in a constant boom-and-bust cycle perpetuated by the PTC for over twenty years, while its apologists insist that, this time, renewing the credit for just a couple more short years will provide the wind industry with everything it needs to compete. Still waiting, ya’ll.
The wind-production tax credit should not be renewed for three principal reasons:
1) It wastes money. The proposed two-year extension would cost taxpayers nearly $13 billion over the next 10 years, according to the Joint Congressional Committee on Taxation. In 2013, when Congress renewed the subsidy for one year, the cost was nearly $12 billion over 10 years. This is more than the federal government spends on energy research in one year.
A better use of taxpayer dollars would be to reduce the ballooning federal debt or to invest in research to find new forms of cheap, clean, reliable electricity. For example, what about a substantial cash prize from the U.S. Department of Energy for creating a truly commercial use for carbon captured from coal and natural-gas plants? Such a discovery would be the Holy Grail of clean energy—permitting the use of coal world-wide to produce an abundant supply of cheap, clean, reliable electricity to reduce poverty while protecting the environment. …
Breaking on Hot Air