The wind energy credit buried in the tax extender deal should get the ax

Ed talked about some of the issues surrounding the current tax deduction extender deal the other day. As of this afternoon, it’s looking more and more like a complicated deal is going to wind up making it to a vote. The plan involves a largely symbolic vote on the President’s executive amnesty plan, with a two stage funding bill which will fund most of the government through the fall / winter of 2015, but place a limit on funding for Homeland Security (and thus, ICE and immigration control activities) only through March when the new Senate majority is in place.

This may or may not prove productive for conservatives, but the aforementioned tax extenders currently under consideration have a serious poison pill buried in them. It continues to dish out billions of dollars in wind energy credits which are distorting the market and continuing to flush taxpayer money into technology which is allegedly standing on its own feet these days. Also, recent changes to the language of the credit open it to systemic abuse. The American Energy Alliance explains.

“The wind PTC was a bad idea yesterday, it’s a bad idea today, and it will be a bad idea tomorrow.

“Over twenty percent of this extenders deal, nearly $10 billion, is a handout to AWEA and its allies like the League of Conservation Voters who spent $75 million during the midterm elections in an effort to defeat Republicans. Now the House Republicans are prepared to reward them with a massive handout courtesy of the American taxpayer. This sweetheart deal will cost American families close to $100 per household, and will stick them with more expensive and less reliable electricity in the future.

“A vote for this deal is also an endorsement of President Obama’s climate agenda, as the PTC is integral to the administration’s costly climate action plan.

As the linked report explains in terms understandable to the layman, there has been a critical change in the definition of who can qualify for this expensive credit. The program previously was available to wind projects which were “placed in service.” This wasn’t nearly as bad as it might have been because the money was at least going to something which had actually been built. The current language, however, extends eligibility to projects which are vaguely described as “under construction.” That term doesn’t mean that there actually have to be any towers erected on site. Anyone with a business plan filed and a request for information on a land lease can be said to qualify as “under construction.” And they most assuredly will.

As the AEA put it, this language would apply the credit “from the moment that a CEO of a wind company simply thinks about building a turbine.” And when that kind of Uncle Sam cash giveaway is made available, you can only imagine the number of people who will line up at the troth. Passing the tax extender deal may be a necessary evil, but this wind credit should be trimmed out of it.

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