Weekly Column by Lamar Alexander: “Wasteful Subsidies for ‘Big Wind’”

Posted on April 8, 2014

One of the things we remember most about the late President Ronald Reagan is what he said about government programs: “The closest you will come to eternal life on this Earth is a government program.”      

Well, my nomination for the most glaring example of a government program that seems to have eternal life is the wind production tax credit. 

Last week in Washington, the Senate Finance Committee considered the renewal of the taxpayer subsidy for what I call “Big Wind,” which expired on Jan.1, 2014. Unfortunately, they chose to renew this taxpayer subsidy and passed it out of their committee for consideration by the full Senate. 

This tax credit, which was enacted in 1992 to jump-start a new technology, has now been on the books for more than 20 years. This, for a technology that was described by Nobel Prize-winning Energy Secretary Chu as “mature” in May 2011.

The United States uses 20 to 25 percent of all the electricity in the world. Where does our electricity come from?  We get nearly 40 percent from coal, 27 percent from natural gas, 19 percent from nuclear, 7 percent from hydro and only 4 percent comes from wind power. Of course, wind power is only available when the wind blows, usually at night, when we need it least.

Here are four reasons this tax credit should stay right where it is, expired:  

  • Problem No. 1:  Cost – The last one-year extension that expanded the wind production tax credit will cost taxpayers $12 billion over 10 years. For 2014, the two-year extension that was just passed out of the Finance Committee will cost taxpayers nearly another $13 billion over 10 years. 
  • Problem No. 2:  Reliability risk – The problem is that Congress is picking winners and losers. When Congress gives wind power such a big subsidy that is sometimes more than the cost of the electricity, it undercuts our coal and nuclear plants. And that puts us at risk as a country that needs these big plants – coal and nuclear – to operate almost all the time to keep the lights on, to support jobs, to keep the cars running, and to make America run.
  • Problem No. 3:  Wind turbines destroy the environment in the name of saving the environment. – You could string 20-story windmills from Georgia to Maine to produce electricity, scarring the entire eastern landscape. Or you could produce the same amount of electricity with eight nuclear power plants on one square mile each. You would still need the nuclear power plants to produce electricity when the wind is not blowing, which is most of the time.
  • Problem No. 4:  Wind power threatens our energy security – Former Secretary of State George Schultz said that we should generate more energy where we use it. That’s especially true with military bases. It could be true for the rest of us in this age of terrorism. Wind power can potentially create long distances between energy sources and users. That is another reason it makes less sense to subsidize these giant turbines in the Great Plains: then someone has to pay for 700 miles of transmission lines through backyards and nature preserves to get the wind power to Memphis.

After more than 20 years and billions of dollars, it is my hope that when this taxpayer subsidy comes before my colleagues on the Senate floor, they will choose to end this subsidy for good.


# # #