“The Governors know that the federal PTC disproportionately benefits States with renewable mandates by distributing the high cost of their policies to taxpayers at large. They also understand that eliminating the PTC will impose the full burden of costly renewable mandates squarely on the States who enacted them. If California, New York, and Minnesota mandate large wind development, it’s appropriate they bear the full cost of their energy choices.”
The United States is in the midst of a fiscal crisis. If Congress and the White House are unable to reach agreement on spending by January 1, crushing tax increases and draconian budget cuts will go into effect sending the country’s already weakened economy into another destructive recession.
Against this backdrop, the 23-member Governors’ Wind Energy Coalition put aside their own states’ $2+ trillion deficits[1] to deliver a message to Congress — extend the wind production tax credit (PTC).…
This month, unity was shattered within the wind industry when energy-giant Exelon Corporation broke ranks with other renewable-energy developers and asked Congress to let the production tax credit (PTC) expire in December. Exelon rightfully argued that the subsidy was distorting competitive wholesale energy markets and causing financial harm to other, more reliable clean energy sources.
In a fit of fury, the American Wind Energy Association (AWEA) voted Exelon “off the island” for insubordination and dismissed their complaint as self-serving, aimed at protecting Exelon’s fleet of Midwest nuclear power plants. AWEA insisted that wind was benefiting ratepayers by driving down consumer electricity prices in the face of “expensive, inflexible generation” like nuclear and coal.
As usual, AWEA position is easily rebutted. Yes, Exelon is concerned about (bizarre) wind pricing on the rates received by its nuclear power plants.…
Wind proponents cite their industry as one of the fastest growing sectors of the American economy, having doubled U.S. nameplate capacity since 2008. But let’s be clear: that recent growth is largely due to the massive infusion of public cash lavished on big wind under the American Recovery and Reinvestment Act of 2009 (ARRA), which is anticipated to pay out $22.6 billion in direct grants with 85% claimed by wind.
Expiration of Section 1603 cash grants, coupled with record-low natural gas prices, will likely collapse the stimulus-induced bubble and push installations back to mid-2000’s levels. Even if the production tax credit (PTC) is extended, offsetting above-market wholesale prices, recent growth will not be repeated.
Wind and State RPS Policies
In the last ten years, more than half of the states adopted renewable portfolio standards (RPS) that encouraged development of home-grown low-emission generation.…