Irresponsible Senate Finance Committee Action on Wind Energy Tax Break, by Glenn Schleede
Posted by Unknown at 3:42 PM
Irresponsible Senate Finance Committee Action on Wind Energy Tax Break
April 11, 2013
Once
again, the Senate Committee that manages to make life miserable for
millions of tax-paying Americans with its manipulation of the US Tax
Code, is acting to aid its friends, punish ordinary taxpayers, and load
another $85 billion in debt on our children and grandchildren.
On
April 3, 2014, by “voice” (no fingerprints) vote, the Senate Finance
Committee reported out an $85 billion tax break ”extender” bill -- which
the Committee calls the “EXPIRE Act.” [1] The bill includes billions in unwarranted tax breaks for special interests, including the wind industry.
As
long as Congress fails to pass a balanced budget, every dollar provided
to special interests in this $85 billion “Extender” bill is a direct
addition to the national debt that will be dumped on our children and
grandchildren. Further, each dollar that Congress adds to the national
debt will be DOUBLED in about 15 years due to interest that will accrue
on that debt.
An
egregious example of an unwarranted special interest tax break in the
Finance Committee’s bill is Senator Grassley’s wind and other renewable
energy “Production Tax Credit” (PTC) and “Investment Tax Credit” (ITC).
Grassley insisted on extending this 20-year old “temporary” tax break
for another 2 years at a cost, according to the Joint Tax Committee, of
more than $13 billion over the next 10 years (and more thereafter).
When
Senator Toomey attempted to eliminate unwarranted energy tax breaks
from the bill, Republican Senators Grassley, Cornyn, Thune, Crapo, &
Portman[2] joined Finance Committee Democrats in voting to keep the massive energy tax breaks in the bill!
The
votes for Grassley’s $13+ billion wind PTC and ITC extension to benefit
“wind farm” owners would result in an equal addition to future
generations’ debt burden! Under Grassley’s measure, owners of “wind
farms” would be able to continue reducing their corporate income tax
liability by $0.023 (adjusted upward for inflation) for each
kilowatt-hour (kWh) of electricity produced by their wind turbines
during the next 10 years.
The
wind PTC was initially passed in 1992 as a temporary incentive to help a
then fledgling industry – with the expectation that wind energy would
be environmentally benign and would become commercially viable. However,
after nearly 40 years of subsidies for wind energy R&D and 20 years
of lucrative wind energy tax breaks -- together totaling over $100
billion:
- Electricity from wind remains high in true cost and low in real value[3] – with the wind industry providing no evidence that electricity from wind will ever become commercially viable (i.e., without large tax breaks and subsidies).
- Producing electricity from wind has proven to have numerous adverse environmental, economic, electric system reliability, scenic, and property value impacts not originally foreseen and still not admitted by wind industry advocates; and
Eight Republicans[4]
(some claiming to be “conservatives”) and 110 Democrats in the US House
of Representatives have signed a letter to House leaders urging
extension of the wind PTC. The tax-writing House Ways & Means
Committee hasn’t taken up the wind PTC, but one of the wind industry’s
Washington lobbyists has bragged that the wind industry still has "very
strong support from Democrats in the House and strong support from some,
but not all, of the Republicans."[5]
Last
December, Senator Grassley told constituents in Iowa that the costly
wind Production Tax Credit (PTC) would be extended soon. “…Congress will
come back after the New Year and approve four dozen or more tax
credits.” “There are a lot of economic interests”…represented in the tax
credits. Those interest groups collectively “put a lot of pressure on
Congress to re-institute the credits’[6]
In
addition to wind industry lobbyists, Grassley undoubtedly was referring
to such Washington establishment organizations as the US Chamber of
Commerce, National Association of Manufacturers, and Business
Roundtable. Organizations such as these once championed private
enterprise but now seem to be heavily influenced by member companies
that:
- Have concluded that there is less risk and more profit in “mining” Washington for tax breaks and subsidies than in pursing truly innovative and productive activities in private, competitive markets.
- Have no problem in accepting special interest tax breaks that load debt on future generations.
The
April 3rd action by the Senate Finance Committee certainly helps
explain why a recent Gallup Survey shows that Congress currently has a
13% favorability rating. If the nation’s “Millennials” understand how
the Congress is adding to the debt that they and their children will
bear, they may assign an even lower rating!
Glenn R. Schleede
Virginia
Virginia
[1] Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.
[2] See “Results of [Senate Finance Committee] Executive Session.040314” download 4/9/14 from: http://www.finance.senate.gov/legislation/details/?id=67094f10-5056-a032-52ff-257830e0a938
[3] Electricity is produced by wind turbines only when wind speeds are in the right range (starting around 6 MPH, reaching rated capacity around 32 MPH, and cutting out around 55 MPH). Electricity from wind turbines is, therefore, low in value because it is intermittent, volatile, unreliable, and most likely to be produced at night in colder months, not on hot weekday afternoons when most needed. Reliable generating using conventional energy sources must always be available to maintain stable electric grids and a reliable electricity supply.
[4] King (IA), Lucas (OK), Runyan (NJ), Fitzpatrick (PA), Gibson (NY), Latham (IA), Noem (SD). Cole (OK).
[5] http://www.snl.com/Interactivex/article.aspx?CdId=A-27696241-11565 (downloaded April 11, 2014)
[6] The Gazette (Cedar Rapids, IA), December 11, 2013.
[2] See “Results of [Senate Finance Committee] Executive Session.040314” download 4/9/14 from: http://www.finance.senate.gov/legislation/details/?id=67094f10-5056-a032-52ff-257830e0a938
[3] Electricity is produced by wind turbines only when wind speeds are in the right range (starting around 6 MPH, reaching rated capacity around 32 MPH, and cutting out around 55 MPH). Electricity from wind turbines is, therefore, low in value because it is intermittent, volatile, unreliable, and most likely to be produced at night in colder months, not on hot weekday afternoons when most needed. Reliable generating using conventional energy sources must always be available to maintain stable electric grids and a reliable electricity supply.
[4] King (IA), Lucas (OK), Runyan (NJ), Fitzpatrick (PA), Gibson (NY), Latham (IA), Noem (SD). Cole (OK).
[5] http://www.snl.com/Interactivex/article.aspx?CdId=A-27696241-11565 (downloaded April 11, 2014)
[6] The Gazette (Cedar Rapids, IA), December 11, 2013.
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