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Linowes: Negative Pricing Distortions of Windpower

By <a class="post-author" href="/about#llinowes">Lisa Linowes</a> -- December 12, 2013

“The combination of the federal PTC and state RPS policies has shielded wind developers from the basic supply and demand forces present in a healthy competitive market. As a result, we are fast-tracking the construction of expensive renewable resources that are variable, operating largely off-peak, off-season and located long distances from where the energy is needed.”

As IER’s recent study found, the wind Production Tax Credit (PTC) disproportionately benefits States with renewable energy mandates by distributing the high cost of their policies to taxpayers at large. And the benefit is enormous — at $23/MWh, the PTC’s pre-tax value of $35/MWh equals or exceeds the wholesale price of electricity in many parts of the country.

No traditional source of electric generation receives a federal subsidy as generous and condition-free as the PTC.