CITIZEN POWER ALLIANCE

CITIZEN POWER ALLIANCE
Po Box 657, Naples, NY 14512 (585) 534-5581
citizenpoweralliance@gmail.com

RE: S. 2821, the Clean Energy Stimulus Act April 9, 2008

Dear Senator,

Citizen Power Alliance strongly opposes the inclusion of industrial wind subsidy in this bill. Extension of the investment tax credit (ITC) and providing incentives for an inefficient technology will only cause a further tax burden on the public. The following points are compelling:

1. The original purposes of tax credits for wind energy – i.e., to encourage technology development and commercialization, gain a foothold in energy markets, and are more competitive with older, established energy sources – have been more than satisfied:
• Wind turbines, blades and towers are now produced by multiple commercial suppliers.
• Thousands of turbines have been installed and more have been ordered.
• The prices of traditional energy sources for electric generation – natural gas, coal, oil, uranium -- have increased dramatically since tax credits were first adopted.

2. Other existing federal tax breaks are huge. For example, most “wind farm” equipment is eligible for 5-year 200% declining balance depreciation for tax purposes – which already permitted recovery of 52% of the capital investment in the first 2 tax years and nearly 3/4th in the first 3 tax years. The recently enacted 50% 1st year “bonus” depreciation allowance further accelerates the recovery of capital costs for “wind farms”; i.e., 60% in the 1st tax year and an additional 16% in the 2nd tax year. In either case, a “wind farm” owner has all his equity back in 18 months or less!

3. Numerous other federal and state tax breaks and subsidies are now available for renewable energy.

4. Tax breaks – not environmental or energy benefits -- have become THE principal reason for building “wind farms.”

5. Excessive tax breaks and subsidies for wind energy are:
• Transferring millions of dollars annually from the pockets of ordinary taxpayers and electric customers to a few large corporations (many foreign owned) that own “wind farms.”
• Misdirecting billions in capital investment dollars to energy projects (“wind farms”) that produce very little electricity. The electricity is intermittent, volatile, unreliable, and most likely to be produce at night and in winter – not on hot late afternoons in July and August when electricity is needed. Because the output from wind turbines is unreliable, they cannot be counted on at the time of peak demand. They are not a substitute for adding reliable generating capacity to meet growing electricity demand or replace old generating units.

6. Claims of job growth and other economic benefits from investments in renewable energy have been grossly overstated. Results being reported are being driven by unrealistic assumptions, not facts.

7. Claims of environmental benefits have been grossly overstated and adverse environmental, ecological, economic, scenic and property value impacts have been ignored by the wind industry.

8. Tax breaks and subsidies for renewables further exacerbate the federal deficit situation.

The Citizen Power Alliance is a coalition of independent groups organized to promote sound energy and environmental policy. CPA holds public officials and regulators accountable, while seeking the protection of the public interest.

Eco preservation demands fiscal responsibility and viable technological solutions. Community power requires government transparency and effective industrial regulation. Commerce must balance development and profit with responsible civic stewardship.

Vote NO on S. 2821, the Clean Energy Stimulus Act or eliminate industrial wind from any other legislative bills that provide investment tax credits (ITC).

CITIZEN POWER ALLIANCE http://citizenpoweralliance.org/