BigWind in Iowa raising electricity prices and scamming taxpayers. Will Ohio investigate?

Iowa brings BigWind ‘negative pricing’ to the mainstream discussion and it is about time! The American people need to understand the TRUTH about what BigWind does to our electricity prices and reliability. Ohioans need to say NO to Cliff Hite and his efforts to increase the number of turbines in our state! What is negative pricing? Here is an excerpt from The NorthBridge Group, “Why wind producers can pay us to take their power – and why that is a bad thing”. If you do not read this entire blog, please review the BOLD typing…

“The federal wind Production Tax Credit (“PTC”) was originally enacted in 1992 to jumpstart the wind energy industry.1 The PTC has since been extended…This paper focuses on one harmful, but often overlooked, aspect of the PTC – specifically how the PTC interacts with wholesale electricity markets to create the phenomenon of distortionary “negative prices.” While the concept of negative prices might at first glance seem to be a money-saver for electricity users, or at best a harmless phenomenon, in fact these negative prices are: (a) funded by taxpayers; (b) distorting wholesale electricity markets; and (c) harming conventional generation and imperiling reliability….

We find that:

The PTC undermines and distorts price signals in wholesale electricity markets by incenting PTC-subsidized wind producers to sell electricity at a loss to earn enormous tax subsidies.

This taxpayer-funded subsidy artificially depresses wholesale power prices, and in hours of the year when demand for electricity is low it can result in negative pricing…

Wind producers can readily turn wind turbines on and off, but have no incentive to do so because they still receive positive margins during negative price hours due to the PTC subsidy they earn when they generate. They have no incentive to curtail their output – which, absent the PTC, would be in their economic interest. The failure of wind generators to curtail output when wholesale prices approach zero has both short term and long term negative consequences. In the short term, the failure of wind producers to curtail output makes it more difficult for system operators to maintain reliability, and also makes it more costly for them to operate the regional electric grid.

In the long run, the PTC destabilizes the market for conventional electricity as generators that are not eligible for the PTC are significantly harmed by negative prices, both in terms of near-term daily operational decisions, as well as long-term decisions to build or retire generation.

America’s continued reliance on the PTC subsidy therefore will invariably deter investments in the conventional power generation needed to maintain a reliable electric system. Conventional generation is critical to reliability because wind generation often does not produce energy during times of peak electricity demand, while producing at high levels (and driving negative prices) when demand is low. In recent years, about 85% of total wind capacity has not operated during the peak hours on the highest demand days of the year, on average. Controllable conventional generation is thus needed to backstop wind and ensure the lights stay on….”

When Iowa utility regulators approved MidAmerican Energy Co.’s Wind VIII project in 2013, Gov. Terry Branstad (R) called the $1.9 billion, 1,050-megawatt build-out a “win-win” for the state.

But two years after turbines began spinning, victory is looking a little bit sweeter on the utility’s side of the ledger, according to the state’s consumer advocate.
The Office of Consumer Advocate, part of the Iowa attorney general’s office, said MidAmerican is unfairly benefiting by seeking to pass through to ratepayers $3.7 million in costs for producing wind energy when wholesale energy prices are negative while keeping the associated federal production tax credits.
“It is not equitable that MidAmerican receive the benefits while its customers’ [sic] bear the costs,” Consumer Advocate Mark Schuling said in a prehearing brief filed earlier this week….

Source: WIND: Consumers contend Buffett’s MidAmerican Energy reaping PTCs at their expense — Friday, March 17, 2017 — www.eenews.net E&E News — Start a free trial

http://graphics8.nytimes.com/news/business/exelon.pdf

Iowa wind farm generates more tax credits than electricity-Ohio will too

The information below is not only true of Iowa, but also Ohio. Our BlueCreek industrial wind site does not have high production numbers (this is public info); in fact, there is no industrial wind site in Ohio that does! Our wind is not sufficient for producing large amounts of wind energy, but you would not know that if you listened to BigWind. BigWind is lobbying, hard, for reduced setbacks in Ohio, along with automatic tax breaks (PILOT), and promoting their ‘jobs’-ha, that’s a laugh. There is absolutely no comparison in the number of jobs that traditional fuels (natural gas and coal) create with their power plants. BigWind generates a handful of construction jobs and then, typically, less than a dozen once the site is up and running.  Wake up America. One Presidential candidate wants to ram these industrial monsters into our communities, while the other says NO.  This industry is raising, and will continue, to raise our electricity rates and that is terrible news for Ohioans, Americans, industry and our poor….

…the Warren Buffett-owned utility company MidAmerican Energy may soon build a massive new wind farm in Iowa. The thing is, electricity is far from the only thing it will generate. Known as “Wind XI,” the proposed 2,000 megawatt wind farm—Iowa’s largest ever—has the potential to produce a lot of electricity, but even more tax credits.

In total, Wind XI could generate up to $1.8 billion in tax credits for its backers over the next decade.

The winners? Warren Buffett; MidAmerican Energy’s other investors; and Facebook, Microsoft, and Google—MidAmerican’s biggest customers, who will receive tax benefits of their own for using wind energy. The losers? Taxpayers and other ratepayers footing the bill.
Unfortunately, this is part of an ongoing trend in wind energy across the country. It’s not the demand for more electricity that’s driving construction, but rather the government’s preferential tax treatment and counterintuitive energy mandates.

The demand for electricity in the U.S. has been nearly flat over past decade, due to slow economic growth and gains in energy efficiency. Despite the lack of new demand, new wind farms are popping up across the country because of the tremendous tax credits they generate for their owners….

And the tax credits Buffett mentions are substantial. Although MidAmerican Energy likes to note that Wind XI is not receiving any financial incentives from Iowa, that’s only half of the story. The federal government provides $23 in credits for every megawatt hour—the large-scale unit of production for energy– of electricity produced by wind and other alternative energy sources. Known as the production tax credit (PTC), this government giveaway means that MidAmerican’s new wind farm could generate $180 million in credits each year.

The federal government does even more than that to ensure green energy producers get ample benefits. MidAmerican Energy can use the PTC for up to 10 years, after recent regulatory changes expanding the life of the credit. In addition to the tax credits, government regulators set a fixed rate of return for MidAmerican Energy to charge its customers. MidAmerican will receive a guaranteed 11 percent return on equity for Wind XI, meaning it will rake in $395 million in profit over the roughly 30 year life of the project.

Another set of reasons why new wind farms are in high demand are energy mandates at both the state and federal level. Currently, 29 states have renewable portfolio standards mandating utilities to generate a certain percentage of their electricity from sources such as wind and solar. On the federal level, the Environmental Protection Agency’s recent carbon regulations—if eventually upheld by the Supreme Court—will shutter many traditional power plants, leaving wind farms to take their place.

In other words, government policy is doing everything in its power to set the stage for wind….

Source: Iowa wind farm generates more tax credits than electricity

Clean Energy’s Dirty Secrets and Hidden Costs to USA!

Are you confused as to why renewables can COST us $? And how can anyone say that they DON’T reduce our carbon emissions? Read below, and you will find excellent analyses of why they do NOT belong on our grid and how they will cost all of us in our pocketbook.  Thank you Governor Kasich and our legislators for passing SB 310 to ‘freeze’ our renewable mandates while their effects are studied!…

…In May of this year, President Obama declared the shift to clean energy a “fight” that was about shaping the sector “that is probably going to have more to do with how well our economy succeeds than just about any other.” At least on that, the president was right. If we get energy wrong, America will throw away the world-leading energy advantages bestowed on it by geology, technology, and capitalism….

Presenting the administration’s Clean Power Plan, EPA administrator Gina McCarthy admitted it was not about pollution control. “It’s about investments inrenewables and clean energy,” she told the Senate Committee on Environment and Public Works in July. “This is an investment strategy.” The president’s favorite corporate-tax inverter has a different take on the nature of the investment opportunity. “We get a tax credit if we build a lot of wind farms,” Warren Buffett told Berkshire Hathaway’s investors. “That’s the only reason to build them. They don’t make sense without the tax credit.” While wind investors hoover up the $23 production tax credit per megawatt hour (MWh) of electricity produced, the real costs of intermittent renewables such as wind and solar are many times greater. And they’re not even good at what they’re meant to do — reduce carbon dioxide emissions.

Deriving a large proportion of energy from renewables is proving extremely costly for Germany…Despite lower economic growth in Germany than in the U.S., German emissions have been rising seven times faster — up 9.3 percent between 2009 and 2013 compared with 1.3 percent for the United States….

The closure of a nuclear-power station shows that something is amiss. Nuclear-power stations emit no carbon dioxide. Their running costs are low and much of the costs are unavoidable whether the stations are kept open or closed — construction and commissioning at the front-end, de-commissioning at the back. Since 2008, the output of America’s nuclear-power stations has fallen by 0.480 billion MWh, a decline of 6 percent. In a properly functioning market, this shouldn’t be happening….

To the life-cycle cost of renewables must be added short-term balancing and longer-term-capacity adequacy to match supply to demand. Because renewables output depends on the weather, an electricity system with a high proportion of renewables needs much more generating capacity. Without renewables, Britain would need 22GW of new capacity to replace aging coal and nuclear-power stations. With renewables, Britain will need 50GW, i.e., 28 GW extra to deal with the intermittency problem. And the more renewables in the system, the worse the problem is…

Levelized costs also ignore extra spending on grid infrastructure. Texas is the leading wind state, accounting for nearly 22 percent of the nation’s wind-generated electricity.  Transmitting electricity from wind farms in the rural north and west of the state to cities such as Dallas and Houston caused grid congestion. The state decided to have consumers back the inaptly named Competitive Renewable Energy Zones (CREZ) grid program to give wind investors a windfall subsidy in the form of access to nearly 3,600 miles of transmission lines. Subsidies via grid infrastructure spending can be more costly than overt plant-level subsidies. Bill Peacock and Josiah Neeley of the Texas Public Policy Foundation reckon that CREZ costs attributable to wind amount to $6.8 billion. This compares to plant-level subsidies of $4.14 billion in the ten years between 2005 and 2015.

Perhaps the dirtiest secret of renewables is how ineffective they are at displacing carbon dioxide emissions. Brookings senior fellow Charles Frank has calculated that replacing coal with modern combined-cycle gas turbines cuts 2.6 times more emissions than using wind does, and cuts four times as many emissions as solar.  If anything, these figures are likely to be too generous to renewables…

The most insidious and destructive effect of renewables, however, is on the wholesale electricity markets. Intermittent renewables, particularly wind, can flood the market at random times of day with zero marginal-cost electricity. The production tax credit means that renewable investors make money from negative prices down to minus $23 per MWh. Episodes of negative prices are evidence of an electricity market that isn’t working. They imply that what is being produced is garbage — someone has to be paid to take the electricity away.

Negative prices crush incentives to invest in the conventional capacity needed to keep the power on when the wind doesn’t blow and the sun doesn’t shine. The OECD report warns that gas, coal, and nuclear-power stations would experience lower electricity prices, reduced load factors, and higher costs because of intermittent renewables. To avoid the risk of “green outs” caused by inadequate investment in conventional and nuclear capacity, governments and regulators have to intervene and construct capacity markets to redress the distortion created by renewables. These don’t come cheap. In the case of Texas, the Brattle Group estimates that a capacity market would cost Texans an extra $3.2 billion a year….

Across the Atlantic, the calamity of renewable energy is becoming more visible each day. It will not be only good economists who see that imitating Europe would be a colossal blunder….

via Clean Energy’s Dirty Secrets | National Review Online.

Even Warren Buffet Admits Wind Energy Is a Bad Investment

Bazinga! This should be reposted all over the web and shared with our legislators!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Despite being famous for touting the idea that the rich don’t pay their fair share of taxes, investor Warren Buffet seems to be perfectly fine with receiving tax breaks for making investments in Big Wind. “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffet told an audience in Omaha, Nebraska recently. “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.”

But while the wind production tax credit may be great for Buffet’s bottom line, it’s harmful for American taxpayers and energy consumers.

The credit’s proponents say that tax breaks for green energy technologies will encourage innovation, but they fail to acknowledge that Washington’s history on these handouts and tax breaks for green energy have consistently failed. For example, we cannot control when or how much the wind blows, and it just so happens that it tends to blow when we need it least. On average, wind energy facilities operate at just 30 percent of their capacity and must be backed up by more reliable forms of energy such as natural gas. Instead of producing energy solutions that can survive and thrive in the marketplace, we’re left with botched green energy projects that have brought us no closer to our energy goals.

If private companies like Berkshire Hathaway are not willing to jump in without government incentives, it is a sign that the energy technology is a bad investment. It simply does not make sense for the government to subsidize energy technologies that are economically unviable, while attempting to restrict other options that provide reliable and affordable energy for everyday Americans….

via Even Warren Buffet Admits Wind Energy Is a Bad Investment – US News.