D. Dowd Muska


Who Pays for Wind Welfare?

November 05, 2015

Wind-powered electricity generation in Texas, the U.S. Energy Information Administration (EIA) reports, “recently hit several all-time highs.” On October 22nd, it peaked at 12,238 megawatts, besting records set on September 13th and October 21st.

This summer, Slate gushed that the U.S. had “finally” begun to build “its first offshore wind farm,” located “near the southeast coast of Block Island, the preppy redoubt off the shore of Rhode Island.” The New York Times was equally enraptured, calling the construction “a moment that its supporters have long anticipated, billing it as nothing less than the dawn of a new clean energy future for the United States, which lags Europe and China in harnessing ocean gusts for electricity.”

Wind capacity in Alaska, the EIA found, “increased 20-fold between 2007 and 2014 ... . This increase is notable in light of the challenges of installing and connecting large wind generators, specifically the high costs of expanding electricity transmission infrastructure in the least densely populated state.”

Good news for wind’s shareholders, employees, activists, and lobbyists. Bad news for taxpayers.

That’s the conclusion of a new analysis by the Institute for Energy Research. The think tank explored “the distributional impacts of federal subsidies for wind energy across all U.S. states.” The results weren’t surprising. Between 2005 and 2014, taxpayers in 30 states sent more revenue “to the federal government … to support wind subsidies than wind producers who own wind facilities in those states received in subsidy allocations.” The “total federal wind subsidy burden over the last ten years” was at least $18.6 billion.

Wind’s suckers were primarily located in the Northeast, Southeast, and Great Lakes regions. Moonbat-infested California was also a loser, along with neighbors Arizona and Nevada. New York, like the Golden State, was looted for more than a billion dollars during the last decade. Other states viciously victimized included Florida ($920 million), New Jersey ($826 million), Ohio ($732 million), Massachusetts ($573 million), Virginia ($462 million), Pennsylvania ($457 million), and North Carolina ($454 million).

No state benefited from wind welfare more than Texas. It collected a net $2.998 billion. Subsidies were also sweet for Oklahoma ($894 million), North Dakota ($666 million), and Wyoming ($503 million). But the largesse wasn’t limited to deep-red states. Also on the top ten list: Oregon ($645 million), Colorado ($520 million), Washington ($500 million), and Minnesota ($450 million).

How did such wide disparities develop? Since 1992, fedpols have offered a tax credit “for each kilowatt-hour of electricity generated from qualifying renewable energy sources … for the first ten years of operation, regardless of actual price of electricity on the wholesale market.” (In 2014, the credit’s value to wind producers was 2.3¢ per kilowatt-hour, amounting to “an expensive direct subsidy of around 50 percent of the wholesale price of electricity.”)

In response, turbines sprouted up in the breeziest corners of the country. State mandates for politically correct power -- officially, “renewable portfolio standards” -- contributed mightily to wind’s growth. And the tax credit wasn’t the only perk supplied by Washington. As as the IER notes, a U.S. Government Accountability Office report “tallied over 80 federal programs across nine agencies that support wind power.” For 2013, the U.S. Energy Information Administration estimated that 37 percent of federal “electricity production subsidies and support” went to wind. Turbines got $5.9 billion -- more than either solar panels ($4.4 billion) or nuclear reactors ($1.7 billion).

There’s nothing about wind, “or the subsidies for it,” writes the IER, “that can be considered an ‘infant.’” So what do we have to show for all the “incentivizing”? Not bloody much. The U.S. gets 4.4 percent of its electricity from wind. (Even hydropower, long out of favor with the “environmental” community, makes a bigger contribution.)

Liberals’ commitment to “fairness” and rage over rapacious corporations are no match for their need to adhere to “green” piousness. The IER’s research confirms that “subsidies to wind producers in the relatively few states with excellent wind resources represent losses to the majority of the states within the U.S.” Even worse, for “states that seem to accrue net ‘benefits’ from federal wind subsidies, these subsidies merely redistribute wealth from taxpayers to wind companies.”

Again, irrelevant. The planet is threatened, from whatever impending cataclysm is being peddled by Vanity Fair, and sweeping, radical, and expensive actions must be taken. Economics be damned, efficiency be damned, tax equity be damned.

The world of wind must be enjoying its windfall. But it should ponder the possibility that the next doomsday-driven industrial policy might not work in its favor.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

# # # # #