Although the tax loopholes and benefits are absolutely essential to the survival of BigWind, it must find buyers for the (expensive) energy that it will (sometimes) produce. Companies like P&G and Amazon make investments with wind sites to (appear to) offset their electricity consumption. But, how many companies are willing to make this wind investment? And, is it wise? Some Hoosiers are educating themselves. Look to the Huntington, Indiana area, where a growing number of individuals are opposing industrial wind sites. An exerpt from their site, written by an economist, states this scenario well. Study the facts and share it with your neighbors…
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.””
“Those are not the words of, say, Sally and Joe living in Huntington County. No, Buffett is one of the richest men in the world, one of the shrewdest investors in the world, too, whose team has analyzed wind energies economic and investment possibilities with a fine-toothed comb. And he finds wind energy, essentially, an economic wasteland, save for the tax credits. Now if Buffett thinks that, why would Huntington be making investments in wind energy? Because the county will increase its tax revenues, even if only by benefiting from tax breaks to the very rich, paid for my ordinary taxpayers. It simply does not make sense…
“Back in 1992, Congress created the Wind Production Tax Credit, or the “PTC,” a small tax credit of about 2c per kilowatt hour that today is an even smaller $23 per megawatt of wind electricity generated, to nurture energy production in the then-infant wind energy industry. Earlier, government supported those who build structures, not energy production. Today, at least the incentive is the production of energy. Government incentives, like the PTC, are often used to promote young but crucial industries. That’s not the problem with the PTC.”
“The history of the PTC has been an off and on credit, renewed since 1992 by Congress for a year or two at a time. Then, it expires and fans of wind [no pun intended] get it renewed….If we were to look at an honest graph of investments made in wind, we would see that it rises with the credit and collapses with its expiration. Moreover the infant industry it is meant to encourage is now more than 30 years old, kept alive by U.S taxpayers who keep paying to make it attractive for rich investors.”
“It’s important, too, to realize that the PTC can only be taken against “passive income” – that is, income from other investments by rich people and big companies. Wall St. bankers put together investors who want tax write-offs, which are provided by the PTC. Recall Buffett’s words: “we get a tax credit if we build a lot of wind farms. That’s the only reason to build them.””
“Approximately $24 billion of Federal subsidies have poured into wind energy since its beginning over 30 years ago. These credits limit funds that might help find really viable sources of alternative energy. In other words, as an investor myself, I’m saying the PTC is a misplaced bet. The PTC actually blocks funding for other green energy technologies that hold more promise. Rather than helping another infant, but worthy technology, the PTC is a handout to rich people and Wall Street.”
“But government largesse does NOT end with the PTC. Not by a long shot. Not in a government as friendly to green energy and as hostile to fossil fuels as the Obama administration is. In fact, rarely has a multi-decade old infant industry enjoyed such disproportionate favoritism. Even though the wind industry produces currently only about 3.5 to 4% of the country’s electricity, it receives 42% of the federal government’s electrical financial support.”
“Combined with other targeted incentives, the federal government, in fact, gives wind producers $56.29 per megawatt-hour, according to the federal government’s own Energy Information Administration – the “EIA”. By comparison, natural gas, oil, and coal power generation only get 64 cents per megawatt, while nuclear power receives $3.14.”
“Seemingly innocuous, the PTC gives wind companies $23 in subsidies for each megawatt-hour of electricity they produce. This money adds up quickly; it costs taxpayers billions of dollars every year…On average, wind turbines are spinning only about 30% of the time and, ironically, can’t spin at all in high winds (Detroit Edison, DTE, to cite only one utility, turns their turbines off when winds exceed 45 mph.)”
“In addition to the support that wind power gets at the federal level, it gets huge support at many state levels, too. Currently, 30 state governments enforce mandatory purchases of wind, solar, or other green energies under so-called Renewable Portfolio Standards that require utilities to buy a certain percentage of their electricity from green sources, whatever the cost. This, of course, jacks up consumer’s electric rates.”
“We’ve all heard the saying, “there is no such thing as a free lunch,” and that applies to government subsidies, too. When lawmakers give special tax breaks to their friends and favorite industries, they shift the tax burden onto everybody else left in the tax base. While subsidies may allow wind turbine makers to pump up their payrolls, such as putting a few people to work in Huntington Co., the rest of the economy suffers. Government subsidies divert labor and capital away from more productive areas of the economy, to those where cronies get richer, which slows overall economic growth – something I would think Hoosiers don’t like.”
“The PTC, when combined with federal and state benefits gives wind producers a great advantage over other energy producers. In fact, it exceeds half of electricity’s wholesale price in many areas of the country. True, more wind energy is being produced each year, and its cost, relative to other forms of electricity is becoming more competitive. But only because of massive subsidies and higher rates for consumers.”
“Federal and state subsidies are so high that they lead many wind farms to sell their electricity at a substantial loss, just to collect the tax credits. Many wind producers are literally paying utilities to buy their product — and yet they’re still turning a profit because the taxpayer foots the bill by providing credits and subsidies.”
“I have no ax to grind against the rich, but I don’t think their gains should come as a loss to great numbers of Americans through higher energy costs.” (source: huntingtonccc.org)
Now, back to current Indiana…
…Another hurdle, however, has yet to be cleared, as the company leading the project – NextEra Energy Resources – is still seeking a purchaser of the electricity the wind farm, once constructed, would produce.
There are parties interested in purchasing that electricity, according to Jeremy Ferrell, project manager for the Whitewater Wind Farm, while acknowledging that without a purchaser, the project might not take place.
“At the end of the day, this project does hinge on finding a purchaser for the power,” Ferrell said Tuesday. “We are still actively marketing that. We’ve seen quite a few more entrants come into the market, related to the clean power plant … they’re deciding whether to get in front of the clean power plant, how they’re going to procure (it), and a lot of those companies are identifying what they’re going to do as far as that clean power plant.
“They are starting to send out more and more test balloons, so to speak, on what’s available out there,” he continued. What, in the world, does that mean?
The project also has another question mark, for while it has received its special exception permits in both Fayette and Henry counties, the situation in Rush County is a different story.
Rush County, in July, voted to increase the setback distance within the county for wind turbines from a non-participating landowners property line to 2,300 feet, in response to a proposed wind farm project by Apex Clean Energy. That decision later led to county commissioners voting to cease negotiations with Apex Clean Energy regarding the Flat Rock Wind Farm project, along with a challenge of the county’s BZA decision in court by the energy company….