Alexander: Ending Wind Subsidy a Good Way to Celebrate New Year, Reduce Federal Debt and Save Tennesseans $52 Million
Posted on January 3, 2014
Says subsidy allows wind developers to give away electricity and still make a profit, which could undercut the continued operation of 25 percent of our nuclear plants
“The massive taxpayer subsidy to windmill developers expired Jan. 1. A good way to celebrate the New Year would be to not renew it and to reduce the federal debt by $60 billion, an amount about equal to the spending in the recent budget agreement.” – Lamar Alexander
MARYVILLE, Jan. 3 – U.S. Senator Lamar Alexander (R-Tenn.) today said Congress should not renew the taxpayer subsidy for wind turbines and use the $60 billion saved to reduce the federal debt.
He said the wind production tax credit, which expired Jan.1, provided a subsidy “so generous that wind developers can give away electricity and still make a profit, while undercutting cheaper and more reliable power from coal and nuclear plants. This ‘negative pricing’ rewards expensive, unreliable power like wind and punishes cheap, reliable power from nuclear and coal plants.” Alexander cited a study by the Center for Strategic and International Studies, which said that continuing the subsidy could make nuclear plants so uncompetitive that 25 percent of them could close by 2020.
Alexander offered four reasons to allow the wind subsidy to expire:
1. Money saved could reduce the federal debt:
“The massive taxpayer subsidy to windmill developers expired Jan. 1. A good way to celebrate the New Year would be to not renew it and to reduce the federal debt by $60 billion, an amount about equal to the spending in the recent budget agreement,” Alexander said. “For the next 10 years, extending the tax credit one year at a time could cost $60 billion or more, based on the most recent data from The Joint Committee on Taxation, about enough to pay for the $63 billion Congress spent in the recently passed budget agreement.”
2. At more than 20 years old, the subsidy was long outdated and unnecessary:
“The subsidy was put in place in 1992 to jumpstart a technology, and according to the Obama administration’s former energy secretary, the technology has matured,” Alexander said. Former Energy Secretary Stephen Chu testified in 2011 that wind energy is a “mature technology.”
3. The subsidy treated Tennessee and many states unfairly:
“A recent study shows wasteful wind subsidies left Tennesseans who pay federal taxes at a $52 million loss in 2012 – meaning we get very little of the benefit because the wind doesn’t blow enough in the southeastern United States, and yet our federal tax dollars go to subsidize Big Wind in other states,” Alexander said. According to the study by the Institute for Energy Research, 30 states paid more to the federal government for wind subsidies than wind producers in their states received. Tennessee’s net loss was $52 million.
4. Windmills are a scar on the landscape and use massive amounts of land for the power they produce:
“At least in our part of the country, windmills are a huge scar on the landscape – you can see their flashing lights for 20 miles,” Alexander said. “You would have to stretch wind turbines the entire length of the Appalachian Trail, from Maine to Georgia, to equal the power produced by eight nuclear plants on one square mile each – and you would still need the nuclear plants or some other form of power generation for when the wind doesn’t blow.” Based on data from the National Renewable Energy Lab, if wind power were to attempt to provide the 20 percent of the United States’ electricity that about 100 nuclear reactors currently do, it would take 150,000 two-megawatt wind turbines stretching the entire length of the earth’s equator.
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