Rep. Marchant Seeks to End Wind Energy Subsidy

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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