Heartland’s Kaminsky misguided on wind energy incentives

Wind power’s incentive, the federal wind energy Production Tax Credit (PTC), does not involve federal outlays of tax money. Conservative Republican Congressman Steve King (R-Iowa) put it well in an op-ed on the wind power credit in Politico earlier this year: "Low, stable tax rates generate jobs and economic growth. This idea has been the bedrock of conservative economic ideology for decades. One industry that represents this essential conservative principle is U.S. wind energy.

"Low taxes in the form of the federal Production Tax Credit for wind have driven as much as $20 billion of private investment a year into the U.S. economy. Wind power is now one of America’s biggest sources of new electricity and fastest growing manufacturing sectors. It has accounted for more than a third of all new U.S. electric generation in recent years… Wind industry leaders know how to expand this business and provide more U.S. jobs. They just need Washington to provide stable, low tax rates. The PTC means keeping investment dollars in the market place – not in the hands of government."

While there was a program in place briefly that allowed conversion of the PTC into a cash payment from the U.S. Treasury, that program was intended to tide the wind energy industry over during the economic meltdown, expired at the end of 2011 and has not been renewed. I’m sure Mr. Kaminsky was aware of this–he probably just forgot to mention it.

Comparing energy subsidies on the basis of a single year is a transparent distortion. The fact is, oil and gas companies have received more than 75 times the total cumulative dollar amount of federal subsidies that renewables have ($446.96 billion vs. $5.93 billion through 2009, according to a recent study from the venture capital firm DBL Investors). We’ve rapped fossil-fuels spokespeople on the knuckles several times for cherry-picking subsidy numbers (for example, here, here, and here), but apparently it’s no use–those misleading statistics are just too tempting to resist.

The states with the most wind power deployed have seen their electric rates rise more slowly than the states with the least wind power. As AWEA Manager of Transmission Policy Michael Goggin wrote here in January:

"For the 30 states with the least installed wind capacity and the District of Columbia, a group for which wind only accounted for 0.3% of electricity produced in 2010, electric rates increased by an average of 26.74% between 2005 and 2010. For the 20 states that produced the largest share of their electricity from wind (ranging from 2% to 15.4%) in 2010, consumer electricity prices increased an average of only 15.72%.

"When one looks at the top wind turbines states, the difference is even more striking. For the 40 states with least wind farm installed and DC, prices rose by an average of 34.10%. For the top 10 states in wind turbines generation (with wind farm providing between 5.1% and 15.4% of electricity), electricity prices increased an average of only 10.94%, or one-third as much as in the 40 low wind use states."

Tom Gray, www.awea.org/blog/