Ohio IS one of the UNlucky states. Read below, we paid $104Million MORE than we received from the infamous Wind Production Tax Credit. Do your neighbors want Big Wind to expand into Van Wert, Paulding, Hancock, Logan and Champaign counties? TEACH them the important facts below. And, pay particular attention to how much subsidy $ goes to BigWind versus our traditional electricity producers. We have tried to educate you in the past about how LITTLE electricity these sites ACTUALLY produce. In Ohio, our industrial wind sites only produce approximately 30% of what they actually told us they would produce, and it is intermittent energy. Our traditional electricity producers like coal, natural gas, nuclear and hydro are ALWAYS running behind the scenes to ‘backup’ the wind turbines when they slow down or stop. Our continued subsidizing of this massive failure is an atrocity….
There is no need to extend a program that has cost U.S. taxpayers $7.3 billion over the past seven years.
‘Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.” So said Christopher Flavin, now president emeritus of the Worldwatch Institute—in 1984.
Thirty years and billions of dollars later, the wind industry is still saying it needs taxpayer support. Congress is currently hearing this argument as it debates whether to extend the 22-year-old “production tax credit” in the lame-duck session. The PTC, which gives wind producers a 2.3-cent tax credit for each kilowatt-hour of electricity produced over 10 years, expired at the end of 2013. Now wind-industry lobbyists are roaming the halls of Congress, asking legislators to renew it as part of a tax-extenders package before adjourning on Dec. 15.
The industry’s arguments are bluster. Wind-power capacity has increased by nearly 5,000% since the PTC was created and the industry now makes billions of dollars in annual revenue. Meanwhile, the credit has devolved into another example of corporate welfare.
Over the past seven years, the PTC has cost taxpayers $7.3 billion, and it is expected to pay out $2.4 billion more in 2015. Combined with other subsidies and programs, wind generators received $56.29 in government subsidies per megawatt-hour in 2010, according to a 2012 report from the Institute for Energy Research. That’s compared with 64 cents in subsidies for natural gas and $3.14 for nuclear power.
The program operates as one of America’s least-known wealth-redistribution schemes, forcing taxpayers to pick up the tab for wind farms beyond their borders. In 2012 more than 30 states paid more in subsidies than wind farms in those states received in tax credits. Citizens in five states paid more than $100 million more in federal taxes than they received from the PTC: California ($196 million), New York ($163 million), Florida ($138 million), New Jersey ($126 million) and Ohio ($104 million). Eleven states paid into the PTC even though they have no qualifying wind production. The unlucky losers included Florida, Virginia and North Carolina.
The credit also encourages abuse—both of the electricity grid and the taxpayer. Instead of paying wind producers based on how much of their electricity is used, the PTC pays them based on how much electricity they generate. Companies that invest in wind power thus receive tax credits to produce something that consumers may not actually want. In fact, producers often pay electricity-grid operators to take their product. This phenomenon is known as “negative pricing.”
Wall Street has figured out that it can use this system to its advantage. The PTC offers major corporations a chance to lower their tax rates by investing in wind energy. But investors also realize that wind farms make little financial sense if the taxpayer isn’t picking up the tab….
It would be a mistake for Congress to renew the PTC again, and it is time to let the wind industry compete with other energy industries in a fair market. Congress should ignore the hot air surrounding the PTC and let it flutter away forever.
Mr. Phillips is the president of Americans for Prosperity.