Away With Wind Subsidies?

By:  Rebecca Terrell
08/18/2014
       
Away With Wind Subsidies?

Expired federal wind power subsidies could mean an end to high electricity bills.

Relief from high utility bills may be on the horizon. That's the claim of 54 U.S. congressmen who support an end to federal wind power subsidies.

In an August 13 letter to House Leadership, U.S. Representative Mike Pompeo (R-Kan.) and 53 of his colleagues wrote that the wind industry survives, not on market demand, but by sponging off taxpayers through "a combination of state mandates and a federal tax credit that is now more valuable than the actual market price of the electricity these plants generate." The congressmen urged the House Ways and Means Committee to "allow the most anti-competitive and economically harmful tax provisions, specifically the wind energy production tax credit (PTC), to expire."

The letter argues that "crony" handouts have already cost billions of tax dollars, and federal assistance reinforces excessive distortions in prices "leading to higher electricity costs for American families." In the past five years federal funding for wind alone has exploded by more than ten-fold, from $476 million the year Obama took office to $4.98 billion annually. Estimates from the Congressional Joint Committee on Taxation place a price tag of another $13.35 billion for a subsidy extension of just one more year. Keep in mind these amounts account for only direct federal wind subsidies and do not include funding from state sources or assistance for other so-called renewables such as solar and wind, nor do they include hidden and lifetime costs, as we will see shortly. By comparison, the anti-"fossil fuel" group Oil Change International reports that subsidies from both state and federal sources for oil, gas, and coal combined amounted to $21 billion last year. From these numbers it's easy to determine Big Brother's pet project.

Why the disproportion? The Energy Policy Act of 1992 enacted PTCs for renewables which were set to expire in 1999. However, lawmakers have continually renewed this federal entitlement program, which not only subsidizes windmill construction but also pays turbine owners per kilowatt hour for power they produce, regardless of its market value.

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