Iowa’s most prominent Republicans are in full tilt propping up wind mills, however not in quixotic fashion, as they are likely to be successful. And that is unfortunate for tax payers. Senator Chuck Grassley, Governor Branstad and Congressman Steve King among others are urging that the federal Production Tax Credit (PTC) provisions for wind energy be extended. They are due to expire at the end of the year.
We find their purposes neither idealistic, romantic or practical in terms of energy.
Idealistic – no – as they go against provisions of the 2012 State Republican Platform which states under the Energy Section
8.5 We believe in free enterprise. Therefore, all affiliated costs of ethanol, bio-diesel, wind, clean coal, oil shale, and other forms of energy research and production should be borne by the private sector.
8.7 We oppose the use of any regulatory body to dictate the type of energy that will be produced and used. Energy production should be based on free-market economics.
Other provisions of the platform if not directly, in spirit, are ignored by their efforts, including provisions advocating major tax reform, and the business as usual special interest approach to legislation. In fairness we add that Grassley, who authored the original wind farm provision to the PTC back in 1992, has said that no single energy tax incentive should be singled out over others before a broad-based tax reform debate takes place.
We would respond that if tax deductions, subsidies, and usage mandates in general are matters of fairness, then fairness requires across the board tax deductions, subsidies and usage mandates for every industry and business including credits and extensions for industries and businesses not subsidized before. True fairness requires tax reform and elimination of special treatments not continuing to abuse tax payers. The fairness argument breads endless requests for special treatment and dis-incentivizes the push for uniform tax reform as that many more subsidized industries would be clamoring to protect their tax sinecures.
Romantic – no – we hate those tall ugly scars on the horizon and their impact on song birds. OK the later we just threw in for effect.
Practical – no – we don’t buy the hype or the hope. The general benefit of wind energy to tax payers/ energy users compared to the cost to them is not justifiable. Cheaper energy alternatives exist. Politicians are extracting taxes from the general population or borrowing money to prop up the wind energy industry and then in many states mandating that those same taxpayers pony up extra money on their utility bills to pay for the privilege of using the more expensive energy.
Commentaries we have read regarding discontinuing wind energy tax favored treatment are succinctly summarized by these excerpts from a letter to a National Journal Energy Blog. The author is Tom Stacy who led an effort to educate about wind energy in Ohio.
Every tax dollar funneled into this make-work industry leverages several investment dollars – not because free market choice makes the investment attractive, but because policies do. Those investment dollars are lost to capital projects that make America more competitive and more energy independent. The program is also co-dependent on state mandates and tax provisions – neither state nor federal assistance sufficient by itself to conjure economic success for renewables.
” . . . compared to investment in natural gas fired or nuclear powered electricity, wind and solar are a far costlier means of pollution mitigation when a fair value analysis is exposed. This is due to the indisputable reality that wind and solar are redundant investments and are dependent on the flexibility and existence of fossil fired plants. So wind and solar may save some fuel, but fuel cost is a minority component of the levelized cost of electricity as disclosed in the EIA electric power annual reports.”
Other important commentaries regarding this matter are available by searching the website of the American Enterprise Institute and the Institute for Energy Research. This weekend we will add to the discussion with our response to the frequently repeated “benefits” of wind energy promulgated by their lobbyists for continued tax subsidies.
