As the federal government endures its first shutdown in 17 years and many federal employees face furloughs, it is important to point out glaring areas of government waste that stem from lost revenues or unnecessary spending. One such wasteful program is the wind Production Tax Credit (PTC), which provides wind energy producers a tax break for every kilowatt-hour of electricity they produce. Now more than twenty years old, this taxpayer-funded subsidy continues to give a mature industry billions each year that Congress extends it.
Just last week the Joint Committee on Taxation estimated that another one-year extension of the program would cost taxpayers more than $6.1 billion, and a five-year extension would cost $18.5 billion. If you weigh the PTC’s cost to taxpayers against the electricity that wind energy produces, the numbers are even more troubling.
In 2010, wind power received approximately $56.29 in subsidies for every megawatt hour it generated, as compared with coal and natural gas, which received $0.64 per megawatt hour according to the Energy Information Administration’s definition of subsidies. If you consider that coal and natural gas – both of which have hundreds of years of supply here in North America – together provide nearly 70 percent of our nation’s electricity at affordable costs, the rationale for continuing expensive subsides for wind power that only produces about 3 percent of the electricity we need seems ridiculous.
Add to that the fact that some of the biggest winners from another PTC extension are some of President Obama’s politically-connected corporate backers and members of various advisory councils at the White House, and the need to end the PTC’s embedded network of wealthy administration cronies becomes more urgent.
For example, MidAmerican Energy, owned by Warren Buffet’s Berkshire Hathaway, is amongst the nation’s largest wind producers, boasting a substantial amount of wind farms with future investments for new projects that will reap millions from another PTC extension. Buffet is a longstanding supporter of Obama and a cheerleader for his tax increases on “the wealthy” but wants to preserve green tax subsidies for his subsidiary wind ventures. Similarly, GE’s Jeffrey Immelt – who chairs the White House jobs council – has long championed the wind PTC, which drives demand for the wind turbines that GE builds.
Another Obama supporter, NextEra’s Lew Hay, benefits from green corporate subsidies. Hay serves on Obama’s jobs council while conveniently being a top beneficiary of wind subsidies. According to the company’s own records, it has conducted more than 1.7 billion worth of tax equity deals made possible through wind subsidy programs.
This wasteful policy is troublesome on its face, but the fact that the government is using our tax dollars to bankroll handouts to the likes of Warren Buffett and Jeff Immelt is simply unacceptable. If the President feels compelled to barricade the World War II memorial because of the government shut down, than the least he can do is shut down the handouts to his billionaire green energy cronies at the same time.