Why is it so easy for some to be dishonest? Wind industry opponents seem to take great effort to avoid fair and honest remarks with most every pronouncement they make. Of course, if they were honest, their arguments would disappear.
A recent example of their struggle comes from the American Energy Alliance (AEA) in a misguided statement from Kansas Congressman Mike Pompeo and 51 other members of Congress who have joined in opposition to an extension of the wind production tax credit (PTC). In a letter sent to Chairman Dave Camp of the House Committee on Ways and Means, the Congressional signatories call for the permanent expiration of the wind PTC. Wind opponent and AEA President Thomas Pyle released the following statement filled with misrepresentations, half-truths, and dishonesty. A closer reading with my comments in italic will make my points. The statement begins:
“The American Energy Alliance welcomes Congressman Pompeo’s renewed efforts to end this special interest giveaway to the wind lobby.”
Pyle does not hesitate to err in his first sentence: The PTC is not a giveaway, it is a tax credit similar to the tax credit most home owners receive. The PTC rewards production as the home owner’s tax credit rewards home ownership. To condemn one tax credit is to condemn them all. What’s more, the tax credit goes to power producers and not their lobby.
The statement goes on: It is now time for the rest of Congress to follow suit and allow the wind PTC to expire at the end of the year. The expiration of this decades old government giveaway is long overdue, yet the wind industry continues to rake in federal dollars and distort energy markets at great cost to American consumers.
No federal dollars are “raked in”. The tax credit simply lets private companies keep a portion of their income based on the production of their wind farm. That’s worth repeating: the PTC lets companies keep more of what they’ve earned. What is the argument against that? Furthermore, the PTC does not distort markets other than to provide much needed competition. An Xcel Energy representative said at a recent AWEA conference that their more recent wind farms are producing power at costs competitive with natural gas and the savings are passed to customers. What’s more, a recent study by the Union of Concerned Scientists found that in 13 of 14 states with RPSs, power prices have risen less than 1%. To be honest, electric bills will be going up as transmission companies upgrade their 1960s equipment and outdated low-voltage lines.
Last year’s extension of the wind PTC, says the statement, expanded the program and fleeced taxpayers to the tune of $12.1 billion.
This is another gross distortion. The PTC lets wind-farm owners keep $0.023 for every kilowatt-hour produced but only for the first 10 years of turbine life. So more correctly, the PTC rewards production and to be honest, taxpayers will pay absolutely nothing for it.
Also, how was the $12.1 billion calculated? The AEA would have to know how many turbines will be erected to the end of 2014, their capacity factors, and some knowledge of the wind for the next 10 years. That’s quite a forecast. Perhaps the author will share his great natural science insight with local forecasters.
The statement continues: Another one-year extension would add another $6 billon to the tab.
Another baseless allegation. However, to calm the authors’ anxiety, they might like to read Nextera Energy’s analysis of the how wind industry investments boost Federal tax yield here: http://www.nexteraenergyresources.com/pdf_redesign/wind_ptc.pdf
The wind industry is no longer the infant that it professes, says the statement, and no longer needs the wind PTC. The Pompeo effort comes at an important moment as Congress finally begins to consider tax reform.
“Tax reform” today is a scary thought. The last time congress “considered” tax reform, taxes for some people went up. But I would gladly join forces with the AEA if it wants to argue for a reduction in federal spending.
Powerful and well-financed lobbyists are working overtime to push Chairman Camp to bury another wind giveaway in any reform proposal.
I’m flattered to think that someone considers me powerful and well financed.
“Growing bipartisan opposition to the wind PTC signals that the time has come to finally allow Big Wind to stand or fall on its own.”
Growing bipartisan support for the wind industry suggests, I would hope, there will be a modest extension to the PTC. Believe it or not, even the wind industry contemplates the time when the PTC ends, and if I sense it correctly, that will be in just a couple more years.
The wind industry has so much to give American citizens in cleaner air, zero pollution, stable pricing (power purchase agreements are often set for 20 years), lease payments to landowners, taxes to rural communities that dearly need them, and jobs to honest people.
Who knows what the price of natural gas will be in 5 years? Europeans pay about $15/million BTUs versus the U.S. where it is now about $3.60/billion BTUs . If the wind industry lets the U.S. export more natural gas to Europe, that would improve the U.S. economy and even the AEA would agree we need more wind power.
Filed Under: News, Policy
“Helmuth is clearly on the dole from fossil fuel interests, but doesn’t even know it!” this is quite a statement, thanks for pointing it out, I will check my account immediately ! 🙂
Do you realize how contradictive your comments are? “He is right that wind electricity is cheaper than fossil fired electricity from new plants. ”
In regard to noise, I can only say that betterments in aerodynamics of the airfoils, the use of winglets to minimize tip-vortices, elimination of noisy gearing by using direct drive generators, and many other improvements can and will be made / applied to new generation turbines, which also will be able to be run more efficiently even in low wind-speed zones, which will allow for distributed power production instead of concentrated power production. The building of smart and micro /macro grids is a necessity, as our grid is already antiquated. But development takes time and money – money the fossil fuel industry has and is still getting abundantly and for no good reason.
We are hearing all the sound-bites from the fossil fuel lobby from you, so on which payroll are you ? 🙂
To counter your “base-load” argument: If you use the ~30% unused power generated by wind installations to generate for example Hydrogen (yes I know, it takes a lot of power, but does it matter? it’s going to be dumped anyhow, so why not use it), you can use it to generate power via Hydrogen powered generation, or you could use it to pump water for a hydro power plant into a storage basin, which can also be used when there is need. And both of these applications are clean energy systems which do not produce emissions, like fossil fueled plants, and are very reliable too.
I’d be happy to answer your questions, if you have any, and there is no hostility in my choir, just facts which you seem not to be aware of.
Tom Stacy says
You are correct that some tax credits CAN be beneficial to society (regardless of any comparison to other forms of unearned revenue such as your straw man, “government handouts”), but the wind credit isn’t one of them. And all tax credits shouldn’t be painted with an overly broad brush as “nothing wrong with them.” As a tongue in cheek and admittedly extreme analogy, what about tax credits for second story burglary rings against the purchase of 16′ ladders? How well does that tax credit fare against “government handouts?”
My point is that rewarding the right things is better than rewarding the wrong things, and some tax credits, the wind PTC, reward the wrong things. The most honest reward is the reward of being paid voluntarily by someone else for voluntarily delivering a discernible good or service to them. But wind electricity is of both indiscernible value and involuntary. In fact the wind tax credit is a reward for a lack of fuel supply control, dependability and timely availability.
Furthermore it subverts an important but ill-conceived energy market run by RTOs and ISOs – markets that fail to recognize and properly reward fulfillment of the two primary markets it makes up: steady-state base load generation and dispatchable load following generation. Wind has no business in either role, yet relies on more of the latter at the expense of the former. But I am preaching to a very hostile choir here, aren’t I?
Joan Lagerman says
Was it honest when they said Oh there won’t be any problems these things are as quiet as a refridgerator? Was it honest when they took hundreds of feet of our property as a safety setback? was it honest when they told the local farmers Oh you might as well sign up everyone else has, they found out it was a lie to late. Was it honest when they said there would be no devaluation in our property value? this industry wouldn’t know Honesty if it hit them in the butt. Living with their Dishonesty for nearly six years now. I will fight with all my might for all my days.
Paul Dvorak says
Ms. Lagerman, you make good points. It was dishonest of a developer to tell you wind turbines were quieter than they are. I have heard their noise and acknowledge that sufficient setbacks are essential to successful installations. Thanks for your comments.
Tom Stacy says
Helmuth is clearly on the dole from fossil fuel interests, but doesn’t even know it! He is right that wind electricity is cheaper than fossil fired electricity from new plants. Too bad, though, that wind plants don’t replace fossil fired plants. A mere technicality? Think again. People should stop thinking of electricity as a commodity product. IT is far from it. Electricity is infinitely perishable, so delivery timing in exact quantities at every location is imperative to avoid efficiency losses. Our conventional sources produce to this metric in a symbiotic, cost and fuel efficient manner. But wind electricity is different, producing sporadically and inversely to demand patterns on several time scales. This output behavior necessitates a continued dependence on fossil fueled electricity, while forcing that fossil fired electricity to become more expensive for everyone. This is due to lower utilization rates of the dependable base load and load following fossil fired plants, lowered fuel efficiency, higher maintenance, etc. That makes wind not symbiotic, but rather parasitic to the rest of the fleet. People this is simple physics. And belive me, despite AWEA rhetoric I DO know how the electricity system works!
Tom Stacy says
This dreamer doesn’t hesitate to err in his first complaint of Pyle’s comments: “The PTC.. is similar to the tax credit most home owners receive.. To condemn one tax credit is to condemn them all. ”
Mr. Dvorak definitely calls the kettle black when disparaging AEA, and proves it from the outset when he attempts to paint “tax credits” with one broad brush and all the same color. Home ownership is a pillar of our society’s culture. It is something we all hope is possible for those who aspire to it. Mortgage lenders assure homes purchased with a mortgage are a sound financial investment in a 24/7/365 source of shelter.
The wind PTC rewards a very small sector of just our electricity sources. What’s more, wind currents are a “use it or lose it” “now you see it now you don’t” kind of fuel, immeasurably less valuable than fuels which can be inventoried, delivered JIT, and consumed the moment they are needed, then conserved for later use each moment they are not. We have a wonderfully efficient and effective electricity system thanks to coal, natural gas and nuclear fuels, which supply over 95% of all electricity.
An analogy for a tax credit for homes that would mirror the wind PTC would be if the federal government gave a square footage occupancy tax break for living in snow forts. Weather dependent housing that is temporary in nature requiring a more stable and permanent structure for times there is no snow cannot be made “competitive” with any amount of financial assistance. These are shortcomings similar to the shortcomings of wind currents as electricity fuel.
The wind lobby is desperate to control the language and distract the public (and elected officials) from the real matters at hand, but their tricks are well known today, and soon will cease. Shouldn’t it be fraud to exaggerate and mislead the public in order to access their hard earned dollars for a product/service that cannot deliver as advertised?
Paul Dvorak says
My argument is that there is nothing wrong with tax credits. They are far preferable to government handouts. The Production Tax Credit rewards production of a useful product. I don’t see the problem with that.
And Herb- taking ANYTHING by force is an infringement on our freedom of action, so I demand the right to invest my money in defense of self, community, and nation as I see fit- which I would do by slashing DoD budgets by 40% IMMEDIATELY. Now there’s a revenue sink, and that government largesse certainly has produced a school of lampreys around the military no longer capable of independent existence.
lecoor beat me on the post- eliminate the producer tax relief for wind, which has a targeted purpose of developing and deploying new or at least under-used production systems, and you need to eliminate the truly huge ones not so targeted the “conventional” systems have enjoyed for decades long past their development and deployment stages. THAT’S a welfare program, investing in the former for limited periods isn’t.
I really admire your ability for viciously snarking by demanding factual support…
Joe Veytia says
The wind industry has made amazing progress in a short time and no doubt driven to some degree by tax benefits. Frankly another benefit has been our energy security and the upgrades to the grid that allow intermittent sources like wind. Energy diversity is just smart for America. It seems that just when new technologies and economies of scale are finally getting close to making wind competitive that Congress wants to abandon ship. The problem is we have a bipolar Congress with so many uninformed and inexperienced in business.
Herb, I completely agree, certainly for 20-50 year decision making purposes.
This is when the unvarnished facts and outlook are the most valuable in making sound moves.
The other element which can’t be forgotten, is that the status quo is untenable, and no mention of the costs of climate change are factored in and are enormous already, with more to come.
Helmuth, your reference to existing subsidies is right on, and isn’t far from bribery as you mentioned. It certainly behaves like it anyway.
Helmuth Geiser says
It is a fact, that wind produced energy is getting less and less expensive, and in some cases less expensive than oil, gas, coal and even nuclear power when considering the immense cost and problem to store safely the exhausted fuel rods.
AEA and other lobbying institutions for the oil, gas and coal industry see the advancements of wind and solar technologies as a threat, so the logical reaction is to use stupid lawmakers who have no clue or are highly susceptible to bribery to advance their cause in order to delay the supremacy of wind energy.
Strange enough, oil companies are among the biggest investors in wind energy – why???
Those who oppose such subsidies on renewables, should be equally as vocal (maybe even more) on the massive subsidies which have been in place for the fossil fuel and other industries for decades. These are certainly mature businesses and capable of looking after themselves without such largesse.
In my view, the comparisons on all energy types on a full lifetime unsubsidised basis will tell a different story.
Lastly, when opposing one energy source please have in mind the rationale and make sure that the one you propose (please explicitly name your recommended alternative) stands the test of cost and performance.
The index is lifetime, unsubsidized please.
Herb Heller says
Come on, let us be objective.
Remove subsidies for ALL energy endeavors.
Taking funds forcibly for such pet purposes is a tax and infringement on the freedom of action of everyone.
Hey, the Dutch built a few windmills (and a canal) in the early colonial era when they settled in what is now NYC area. It is nothing new but was the voluntary investment of a newly freed people.
An even worse effect is that government largesse, in whatever form expanded, produces a culture of groups loyal to the ‘establishment’ and no longer capable of independent thought and action.