Alexander, Six Senators Oppose Wasting up to $9.4 billion on Extension of Wind Production Tax Credit

Letter to Senate leaders says the “temporary” wind subsidy wastes billions of taxpayers’ dollars every year it is extended

Posted on November 19, 2015

WASHINGTON, Nov. 19, 2015 – Sen. Lamar Alexander (R-Tenn.) today, along with a bipartisan group of six senators, sent a letter to Senate leadership expressing their opposition to an extension of the wind production tax credit.

In a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Harry Reid (D-Nev.), the seven senators argued that the expensive subsidy for wind wastes billions of taxpayers’ dollars every year it is extended. 

“This expensive subsidy for wind creates an incentive for investors to build unreliable and unsightly sources of electricity, and distorts the market by giving wind an unfair advantage over other, more reliable and cost-competitive forms of electricity generation,” the letter states. “Even after 22 years and billions of dollars of subsidies, wind only produces four percent of our country’s electricity, according to the U.S. Energy Information Administration, and that’s when the wind blows – which is only about 35 percent of the time and usually occurs at night, when we don’t need more electricity.  The subsidy for Big Wind is so generous that at times, wind producers can give away their electricity and still make a profit.”

In July, the Senate Finance Committee voted 23-3 to approve legislation to extend expired temporary tax provisions, which included a two-year extension of the wind production tax credit through 2016. The House of Representatives has not extended the wasteful subsidy, and the seven senators agree with the House that the wind production tax credit should remain expired.

Alexander was joined by Sens. Joe Manchin (D-W.V.), Shelley Moore Capito (R-W.V.), Jeff Flake (R-Ariz.), John McCain (R-Ariz.), James Risch (R-Ida.), and Pat Toomey (R-Penn.).

Text of the letter is below:

November 19, 2015

The Honorable Mitch McConnell                               The Honorable Harry Reid

Majority Leader                                                          Minority Leader

United States Senate                                                  United States Senate

U.S. Capitol Building, Room S-230                           U.S. Capitol Building, Room S-221

Washington, DC 20510                                              Washington, DC 20510

 

Dear Majority Leader McConnell and Minority Leader Reid:

 We write in strong opposition to extending the wind production tax credit.

The House of Representatives has not extended the wind production tax credit, and we agree with the House that this wasteful subsidy should remain expired.

The wind production tax credit has been in place for 22 years and wastes billions of taxpayers’ dollars every year it is extended. According to the Joint Committee on Taxation, Congress’ decision to extend the wind production tax credit last year will cost taxpayers $6.2 billion over 10 years. Further, the Joint Committee on Taxation estimates that the two-year extension proposed in the Tax Relief Extension Act of 2015 (S. 1946) would cost another $9.4 billion over the next ten years – $5.2 billion for 2015 and $4.2 billion for 2016.

The “temporary” subsidy for wind was first enacted in 1992, but has been renewed nine different times since it first expired in 1999. According to the Congressional Research Service, from 1992 to 2014, the production tax credit has cost taxpayers $13.8 billion. In the last seven years alone, the wind production tax credit has cost taxpayers $7.3 billion – more than $1 billion per year.

This expensive subsidy for wind creates an incentive for investors to build unreliable and unsightly sources of electricity, and distorts the market by giving wind an unfair advantage over other, more reliable and cost-competitive forms of electricity generation. Even after 22 years and billions of dollars of subsidies, wind only produces four percent of our country’s electricity, according to the U.S. Energy Information Administration, and that’s when the wind blows – which is only about 35% of the time and usually occurs at night, when we don’t need more electricity.  The subsidy for Big Wind is so generous that at times, wind producers can give away their electricity and still make a profit. 

Congress should refuse to extend this wasteful tax credit, and we look forward to working with you to resolve this issue.

                                                                                    Sincerely,