A Free-Market Energy Blog

Texas’s CREZ Transmission Line: Wind Power’s $7 Billion Subsidy (ratebase socialism as ‘infrastructure improvement’)

By Robert Bradley Jr. -- February 16, 2018

Do not think that the wind power industry has market viability. Without the federal Production Tax Credit (PTC), wind would be all but dead. And without socialized transmission blessed by state and federal regulators, wind-power growth would be checked even with the hyper-generous PTC, now standing at $0.024/kWh ($0.035 pre-tax).

And if you think that the massive wind lobby–led by the $18 million American Wind Energy Association–is not going to push to get more subsidies from President Trump’s proposed $1.5 trillion infrastructure improvement plan, think again.

Remember CREZ: 2008–2013

With uneconomic transmission on the table in different political venues, never forget Texas’s $7 billion gift to the wind industry.

Then Texas governor Rick Perry championed the whole deal into law, another example of Republicans setting the table for the Democrats’ energy policy: Today’s climate alarmism/forced-energy-transformation crusade.

An October 2013 article by Jim Malwitz in The Texas Tribune, “$7 Billion Wind Power Project Nears Finish,” provides the details.

The subtitle read:

3 Comments


  1. Matt Held  

    Prolific Panhandle wind energy has pushed ERCOT average annual wholesale prices down to $26/MWh in 2016 and 2017. This more than offsets the socialized cost of CREZ. It’s helped to usher in the demise of lignite plants and arguably resulted in bankruptcy of several gas-fired generators because they are no longer the marginal cost generator, and unable to compete at such a low wholesale market clearing price…thanks to the volume of wind energy. Wind developers as beneficiaries of the PTC was already a given, regardless which state they are built. As a Texas ratepayer, I am delighted that we have access to this abundant supply. In other states, 10’s of GW of wind projects cannot get built in NE, IA, WY, etc. because they do not have access to transmission. AEP’s 2-GW Windcatcher project in Oklahoma is inextricably linked to a 360 mile, 765kV transmission line, without which OK panhandle wind is stranded. $4.5 billion total cost to the AEP ratepayers and it was done without a competitive procurement process.

    For the record, I am not in the wind energy sector. I am a Texas ratepayer and the socialized cost and impacts of fossil fuel combustion more than justify the socialized cost of CREZ which is making the Texas lignite fleet and 30-40 year old gas units rapidly obsolete.

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