wind (2)

In 2014, the Wall Street Journal published an article entitled "Wind Power is Intermittent, But Subsides Are Eternal."  Rep. Kenny Marchant (R-TX) deserves credit for trying to prove them wrong.

Marchant and Rep. Mike Pompeo (KS) are seeking to end a two decade long subsidy to the unprofitable wind energy sector by introducing H.R. 1901, the PTC Elimination Act.  H.R. 1901 would phase out and repeal the renewable energy production tax credit (PTC), the central federal handout to unprofitable wind energy corporations.  

The PTC gives wind producers a 2.3-cent tax credit for each kilowatt-hour of electricity produced.  The industry has become reliant on federal and state support despite the fact that wind energy is unreliable and costs more to produce.  The industry, which claims to make $1 billion a year, does not need a federal handout and should sink or swim on its own, without taxpayer support.  The PTC was originally designed to kickstart the industry to be self-sufficientbut has become another form of corporate welfare.  A cottage industry of lobbyists have sprung up.  Their sole mission is to extend the needed government support mechanism. 

Congressman Marchant said “If we want to build a healthier American economy, Congress must get rid of the dead weight in the tax code that is limiting our nation’s potential. That’s why I have introduced legislation to eliminate the production tax credit. Since its creation in 1992, the PTC has ballooned from a temporary boost for energy innovation into a massive special interest handout for the now multibillion-dollar wind industry. Today the wind industry regularly produces more energy than the market demands while hardworking taxpayers shell out billions of dollars each year in PTC support. In fact, because the credit pays claimants for 10 years of energy produced, Americans are currently on the hook for a minimum of $6.4 billion over the next decade.

“The fully mature wind industry should not be spoon-fed by taxpayers any longer. Even the industry’s top lobbying organization admits wind is a mainstream part of the market and has publicly supported a future phase-out of the PTC. The PTC Elimination Act would begin this phase-out immediately by significantly scaling back PTC handouts to those who are eligible. Similar proposals have been estimated to save nearly $10 billion. But the PTC Elimination Act doesn’t stop there. It would also completely dismantle the credit’s statutory framework and use the savings to lower the U.S. corporate tax rate. Even the president agrees that the U.S. corporate tax rate – which is the highest in the industrialized world – must come down to keep American businesses competitive. The PTC Elimination Act may only be one piece of the effort to fix our broken tax code, but it puts the American people first and levels the playing field both at home and in the global marketplace. That’s the approach to tax simplification we must use to revitalize the American economy.”

The American people pay at least $12 billion annually to prop up wind energy.   The time has come to pull the cord and end the cycle of subsidies and cronyism.  

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League of Conservation Cronies

The League of Conservation Voters is flooding the airwaves with negative attack ads against GOP candidates across the nation but much of their funding comes from crony capitalists in the wind industry looking for renewal of their tax subsidies, the Washington Times reports: 

The League of Conservation Voters is going all in with $25 million on the table in a desperate gamble to keep the Senate in Democratic hands. “This is five times more than what we spent in 2010,” Daniel Weiss, a senior vice president of the league, tells a C-SPAN interviewer. In addition to the usual torrent of television commercials, the league will pay for a get-out-the-vote drive in the final weeks of the campaign. It’s all about green — including putting more of it into the pockets of the league.

At the top of the “environmental” agenda is renewal of the wind-production tax credit that expired last year. Since 1992, this credit transferred $24 billion to big companies invested in windmills, a hopelessly uneconomic power source that only works in a breeze.

Naturally, the wind-energy industry wants its free money, because without the government cash, it can’t keep the lights on. Enter the League of Conservation Voters, with campaign funds to aid the six most endangered Democratic senators, on whom they will count to press the subsidy button to restore the flurry of wind freebies.

The league says Democratic control of the Senate is the only thing keeping Republicans from rolling back other “green” subsidies. “Power plants are the No. 1 source of climate pollution,” says Mr. Weiss. ” If a number of senators lose and the Senate firewall is destroyed, then the Senate, like the House, will pass laws that will undo existing environmental protections.” (We must all hope.)

The league, including its treasurer, Tom Kiernan, has a lot at stake. Mr. Kiernan is the CEO of the American Wind Energy Association, which blows hard for restoration of the multibillion-dollar tax credit. Another board member, Peter Mandelstam, is CEO of Green Sail Energy, a firm to develop offshore windmills. Board member Theodore Roosevelt IV, great-grandson of the president, is a managing director of Barclays Capital with a portfolio that includes a $400 million investment in the $2.5 billion Cape Wind offshore windmill farm in Nantucket Sound off the Massachusetts coast.

Republicans must remember who paid for these attacks on their candidates when Congress returns. Some in the party are susceptible to the claims of “renewable energy,” but now the boondoggle is as much bad politics as bad economics.

The self-dealing is done in the name of healing the planet, all of whose ills the league blames on affordable energy sources. “The prolonged drought that we’re facing in the Southwest and California may be climate-related,” says Mr. Weiss, ” … so we’re already seeing the effect of climate change here.”

Wind subsidies may keep the Dom Perignon flowing in the boardrooms of the environmentalists, but the subsidies won’t do a thing to make water flow to the farmers in California’s parched valleys, fields and deserts. Spools of environmental red tape won’t prevent forest fires and lower the planetary thermostat. Most of the available wind comes in a bag that looks a lot like someone from the League of Conservation Voters.

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