Local Wind Subsidies: New York State’s Money-Road to Nowhere
Special political favor at the local, state, and federal levels have created an artificial industry: industrial windpower. Massive turbines have resulted in negative ecological and economic effects. Rural towns and countryside across the USA have become the dumping grounds for massive infrastructure producing a paltry amount of remote, unreliable energy.
New York State has more than its share of such malinvestment and damage. State Comptroller Thomas DiNapoli recently reported that tax exemptions by NYS’s Industrial Development Agencies (IDAs) were not creating jobs and “shifting tax burdens” from mega-corporations to local residents.
As a result, we have the spectacle in Upstate New York of taxpayer-subsidized industrial wind installations driving people from their homes — while further endangering the populations of eagles, hawks, herons, cranes, bats, and all magnificent flying creatures. Rural wind power, in short, is not only a fiscal fairness issue, it is an environmental issue of the first order. Washington, D.C. environmental groups, are you listening … ?
Background: Wyoming County Subsidies
The Wyoming County Industrial Development Agency (WCIDA) was established under New York State legislation and regulation as a “public benefit corporation.” Its mission “is to promote, encourage and attract economic development projects in Wyoming County that result in the retention and/or creation of job opportunities that will generate additional tax revenues.”
Supporting and attracting job-creating businesses is one thing, the IDA’s methodology is another, as told in a WCIDA recent press release: “Wind energy powers agency’s loan program.” In it, the WCIDA proudly reported redistributing “$3.2 million dollars over the last six years” that it had received from wind developers, to various businesses in the county.
The part they left out was that the money was first taken from taxpayers, ratepayers, and successful businesses. It was then given to Big Wind developers, who gave a tad bit of it back to the County, who then recycled some of those revenues back to businesses and people with the right connections.
What has been going on in our towns and counties (and across the nation) with industrial wind flies in the face of any meaningful concept of “public benefit.” By relying almost solely on Big Wind projects for funding, the WCIDA has blinders on when it comes to the numerous larger issues — civil, economic, and environmental– surrounding industrial-scale wind energy.
Furthermore, as reported in a May 2nd news article, NYS Comptroller Thomas DiNapoli found that
tax breaks provided by the state’s IDAs are not effective in creating jobs…. DiNapoli’s office has found no significant correlation between the provision of tax exemptions and the creation of new job opportunities. Since IDA tax breaks reduce the overall amount of taxable land and enterprises within New York municipalities, they effectively shift the burden of taxation onto local residents and small businesses.
In addition to providing few jobs and ultimately “shifting the tax burden onto local residents,” the IDA’s actions impose many other immeasurable negative impacts on the area. Besides making people ill and driving some from their homes, trashing peoples’ property values, and forever changing the character of the area – these giant bird killers (“Cuisanarts of the air,” as a Sierra Club official described wind turbines in a moment of candor) slaughter countless eagles, bats (already under serious threat from disease) and other magnificent flying creatures worldwide.
The mammoth footprints of industrial wind installations fragment prime habitats, drive species out of their nesting areas, and further threaten already endangered species with extinction.
Corporate Welfare ($billions, not millions)
The $2.2 billion dollars of stimulus money given to renewables (mostly wind), 80% of which ended up going overseas. The “Section 1603 Direct Cash Grant Program” from the U.S. Treasury is worth 30% of the value of these industrial wind projects. The Production Tax Credit – PTC (aka: “Permanent Tin Cup”) pays another 2.2 cents per kilowatt hour.
Applying this to the Lackawanna Steel Winds Project in Lackawanna, New York), the project manager told us (in 2008) that each turbine cost approximately $5 million. (Could be much more by now, as in December 2010, the U.S. Energy Information Administration determined that the cost of new wind projects increased by 21% in the previous year.) That makes Invenergy’s proposed ‘Stony Creek’ project of 59 industrial wind turbines in Orangeville, New York worth approximately $295,000,000 – the 30% Direct Cash Grant totaling $88,500,000. There are nearly 250 wind turbines already up in Wyoming County. Do the math.
The PTC and 1603′s direct cash is a levy that all taxpayers must pay for an otherwise nonviable venture. Their real function is to generate income via tax avoidance schemes for rich multi-national conglomerates – and enable those conglomerates to use our tax and rate money as campaign contributions to ensure that friendly legislators and bureaucrats remain in power.
Still More Subsidies
In addition, the state of New York is involved. With the blessing of the NYS Public Service Commission, NYSERDA administers System Benefits Charges (SBC), Renewable Portfolio Standards (RPS) and a market in Renewable Energy Credits (RECs) – all subsidized by fees collected through your electric bills.
On a per kWh basis, wind receives 80 times the public subsidies received by fossil fuels, but produces no reliable electricity capacity and very few American jobs. In fact, for every green job that wind supposedly creates, it destroys two to four regular jobs – in large part due to “skyrocketing” electricity rates.
Why would anyone willingly pay for such an obvious “lemon”? Government is subsidizing defective machines, not because it will improve electricity generation (quite the contrary), but rather because politicians are enriching their friends in Big Wind– and in turn, Big Wind helps them get re-elected. They are pretending to challenge the status quo, while in fact they are reinforcing it big time, while playing shell games with ratepayer and taxpayer money via the IDA’s nefarious loan programs.
The IDA is now trying to convince us that our recycled taxpayer money is creating secondary jobs across the county, thanks to wind. Most likely, these jobs will be added to the Administration’s list of supposed “green jobs,” in continued attempts to hoodwink the American public as to how many jobs the Green Scam is actually producing.
Four Questions for WCIDA
In the face of this overwhelming evidence that wind power is a civilly, economically, and environmentally destructive energy option, the Wyoming County IDA wants us to believe that it is somehow a good idea to keep pouring money into a one-dimensional economic development plan.
The WCIDA needs to answer some critical questions:
1) Shouldn’t the IDA be worried about what happens to a county that is so heavily dependent on a single government program, when the government could suddenly end that program – which in the case of industrial wind is inevitable, because it is simply NOT economically sustainable?
2) Shouldn’t the IDA be concerned about the growing negative public realization that payoffs are being made by corporate interests to government agencies and elected officials, who then have a vested interest in perpetuating and expanding this taxpayer-funded industry in return for “donations”?
3) Doesn’t the IDA have a responsibility to ensure that the programs, projects and industries it supports and subsidizes first and foremost do not harm people, or destroy vital ecological resources – including bird and bat species that are vital to the county’s and region’s agricultural base, tourism and ecosystem?
4) Would the IDA support any other industry that had such harmful impacts on people and the environment?
Why should Wyoming County, the State of New York, the United States Congress and the US Fish and Wildlife Service be subsidizing, protecting and promoting the destruction of both peoples’ lives, and these valuable and endangered species? Why should they do it on the backs of taxpayers and ratepayers? New Yorkers and indeed, all Americans, need to know.
On July 13, the Ithaca Journal article, “Report says IDA investment fails to create jobs,” stated:
The annual analysis of Industrial Development Agency data, produced since 2009 by the statewide Getting Our Money’s Worth Coalition, shows ‘a widespread failure of New York’s main economic development tool to meet job creation goals.’ The analysis shows $182 million in IDA tax breaks went to companies that cut jobs, failed to create jobs, or didn’t promise to create any jobs.
All this suggests that the WCIDA would much better serve all of us by developing a comprehensive and diversified economic development plan that does not rely on recycled tax dollars from the wind farm scam– which will inevitably disappear.
Time for Change
A blowback has begun regarding the naked wealth transfer from taxpayers to Big Wind corporations, including from IDAs. On the Federal side, the U.S. House Energy Committee recently delivered a blistering report about the Section1603 wind energy subsidy program: Where Are The Jobs? In another recent article, “Wind Energy Jobs Myth” at MasterResource, Lisa Linowes reported: “Seventy-five percent of the Section 1603 largesse was lavished on Big Wind, yet, despite billions of taxpayer dollars, the [wind] sector experienced a LOSS of 10,000 direct and indirect jobs in 2010.”
Thankfully, more and more U.S. taxpayers and ratepayers are waking up to the fact that our $16 trillion indebted nation cannot afford further taxpayer-generational theft. As a result, both the PTC and Direct Cash Grants corporate welfare programs are set to expire at the end of 2012. Still, fiscal conservatives have work to do to dismantle a highly-evolved system of state- and federal-financed corporate welfare. The time for science-based energy policies is now.
Mary Kay Barton, a retired health educator and small business owner in New York State, is a tireless advocate for scientifically sound, affordable, and reliable electricity for common Americans. She has served over the past decade in local Water Quality organizations and enjoys gardening and birding in her National Wildlife Federation “Backyard Wildlife Habitat.”