Alerts
These postings are provided to help publicize the efforts of affiliated groups and individuals related to industrial wind energy development. Most of the notices posted here are not the product of nor are they necessarily endorsed by National Wind Watch.
Source: Glenn Schleede
Pickens profits show why PTC should not be extended
Contact your congressmembers today! The U.S. House may be voting this week to extend the PTC.
T. Boone Pickens’ decision to build a “Wind Farm” shows why the Wind Production Tax Credit (PTC) should NOT be extended
Right now, wind industry lobbyists are pushing the US Congress to extend the highly lucrative wind “Production Tax Credit” (PTC) – an action that could shift another $3 billion [i] in tax burden from “wind farm” owners to ordinary taxpayers.
A recent decision by Texas oil billionaire, T. Boone Pickens, reported by Reuters on April 18, 2008, shows why the Congress should end the wind Production Tax Credit.
According to the Reuters story, [ii] Pickens expects “…to turn at least a 25 per cent return” on his plan to spend $10 billion to build the world’s biggest “wind farm,” consisting of 2,700 turbines and totaling 4,000 megawatts of generating capacity.
Mr. Pickens probably can make a 25% return by building a costly “wind farm” – but at the expense of millions of ordinary taxpayers and electric customers.
His decision shows dramatically what Congress and other federal and state officials have been slow to recognize; i.e., “wind farms” are being built primarily for their lucrative tax benefits and subsidies – not because of their environmental or energy benefits.
Contrary to wind advocates claims, “wind farms” are not environmentally benign, their environmental advantages are greatly overstated, and their adverse impacts are significant.
A 25% return with little risk.
Mr. Pickens’ plan to earn a 25% return on a $10 billion investment in wind may sound risky but with huge federal and state tax breaks and subsidies now available, there is little risk.
Detailed information — e.g., on his financial and tax situation and plans for financing the venture — would needed to determine whether Mr. Pickens can achieve his expected 25% return. However, calculations based on facts about five of the currently available federal and Texas tax breaks and subsidies show that his claim is realistic.
1. Wind Production Tax Credit (PTC). First, he would receive the Wind PTC, currently $0.02 per kilowatt-hour (kWh) for electricity produced during the 1st 10 years of operation, which the Congress is being pressed to extend beyond its current December 31, 2008, expiration date. By itself, this tax credit would reduce his tax liability over 10 years by $2.45 billion. [iii]
2. Accelerated Depreciation. Second, his $10 billion “wind farm” investment would qualify for the exceedingly generous 5-year, double declining balance accelerated depreciation for federal income tax purposes. [iv] That means that the following amounts would be deducted from his otherwise taxable income and would further reduce his federal income tax liability; specifically:
| Tax year |
Further reduction in income tax liability (in addition to PTC) |
||
| % of capital investment | Amount | ||
| 1st | 20% | $ 2,000,000,000 | $ 700,000,000 |
| 2nd | 32% | $ 3,200,000,000 | $1,120,000,000 |
| 3rd | 19.2% | $ 1,920,000,000 | $ 672,000,000 |
| 4th | 11.52% | $ 1,152,000,000 | $ 403,200,000 |
| 5th | 11.52% | $ 1,152,000,000 | $ 403,200,000 |
| 6th | 5.76% | $ 576,000,000 | $ 201,600,000 |
| Totals | 100% | $10,000,000,000 | $3,500,000,000 |
Note that these deductions from otherwise taxable income and from tax liability could be taken regardless of whether the $10 billion “wind farm” investment is financed with debt or equity. [v]
Note also that, in addition to the further reduction in tax liability, this generous accelerated depreciation deduction for federal income tax purposes has two other huge benefits; specifically:
- Prompt recovery of all the owner’s equity investment. Quite likely, the equity investment would be no more than 50% with the remaining borrowed to reduce its cost. If Mr. Pickens provided equity of 50% (i.e., $5 billion), the table above shows that he would recover thru depreciation deductions all of his equity investment in less than 2 years and in just over 1 year if the project begins operation late in the first tax year. With no remaining equity investment, his return on equity would be infinite.
- A large interest free loan. The depreciation deduction continues even though all equity has been recovered. Thus, Mr. Pickens would, in effect, be receiving an interest free loan, courtesy of US taxpayers for an amount equal to the debt financing.
If Mr. Pickens were unable to use all the tax deductions, schemes are available to “sell” the tax credits to other firms that have tax liabilities that they wish to avoid.
3. Texas franchise tax break. Tax breaks for “wind farms” are not limited to those provided by the federal government. Texas allows a corporation to deduct the cost of a “wind farm” from the Texas franchise tax in one of two ways: (1) the total cost of the system may be deducted from the company’s taxable capital; or, (2) 10% of the system’s cost may be deducted from the company’s income. Both taxable capital and a company’s income are taxed under the franchise tax, which is Texas’s equivalent to a corporate tax. [vi] Details on Mr. Pickens financial and tax situation would be needed to estimate the value of this tax break.
4. Texas Renewable Portfolio Standard (RPS) and Renewable Energy Credits (RECs). In addition to all the tax breaks, Texas has virtually assured big profits for “wind farm” owners by requiring that a growing percentage of the electricity sold in Texas must come from “renewable” energy, which, in Texas is almost exclusively wind. The Texas’ RPS and REC schemes assure that revenue received by “wind farm” owners for their electricity and renewable energy credits will exceed normal market prices. The higher costs forced on electric distribution companies are passed along to electric customers in their monthly bills — apparently with the blessing of the state’s political leaders and regulators.
5. Transmission Capacity – Another generous subsidy for Texas “wind farm” owners. Most of Texas’ “wind farms” are located distant from the areas where electricity is needed. Texas political leaders and regulators have mandated that additional transmission capacity will be built and that the cost be borne by electric customers in their monthly bills, not by the “wind farm” owners who are profiting so handsomely. [vii] This requirement amounts to another huge subsidy for “wind farm” owners. Adding transmission capacity to serve distant “wind farms” is very costly. First, the estimated cost of building the transmission capacity ranges from $3.78 billion to $6.38 billion. [viii] Second, significant amounts of electricity is lost as it moves over transmission lines, especially over long distances so not all the electricity that the “wind farm” produces ever reaches electric customers. Third, wind farms use transmission capacity inefficiently, resulting in high unit cost for the electricity that is eventually received. [ix]
When all the tax breaks and subsidies are considered, Mr. Pickens’ 25% return on his investment looks very realistic.
Texas is not alone in making “wind farms” hugely profitable for owners and costly for taxpayers and electric customers. Various other states have adopted similar tax breaks and subsidies.
Those tax breaks and subsidies – adopted initially to help a “new” technology get a foothold in energy markets rapidly attracted a powerful industry constituency with millions of dollars to spend for lobbying, campaign contributions, and misleading advertising.
Harmful wealth transfers and misdirected capital investments.
For more than a decade, wind industry lobbyists and other wind energy advocates have greatly overstated environmental and energy benefits of wind energy and understated its adverse environmental, ecological, economic, scenic and property value impacts. Only during the last 3 years have the facts begun to emerge about the low quality and value of electricity from wind turbines, the high economic cost, and the adverse environmental, ecological, scenic and property value impacts.
Those facts are gradually making their way into the media but have yet to penetrate the US Congress and state governments. Instead, members of Congress and state officials parrot false and misleading claims from lobbyists and, even now, are proposing to extend huge, unwarranted tax benefits and subsidies for the industry.
These officials seem either not to recognize what they have done or not to care that federal and state wind energy policies, tax breaks and subsidies for the wind industry are:
- Transferring hundreds of millions of dollars annually from the pockets of ordinary taxpayers and electric customers to a few large corporations that own “wind farms”– or that buy tax credits from wind farm owners who cannot use them. These include US firms such as the FPL Group that apparently has been able to escape paying any federal income tax in some years despite large profits, as well as several Wall Street and foreign-owned firms (e.g., Iberdrola, Shell, BP, Babcock & Brown) that wish to reduce the federal corporate income tax that they would otherwise have to pay on profits from other operations.
- Misdirecting billions of capital investment dollars to energy projects (“wind farms”) that produce very little electricity – which electricity is low in quality and real value. Electricity from wind turbines is intermittent, volatile, and unreliable. The electricity is low in real value because it is most likely to be produced at night in colder months, not on hot weekday late afternoons in July and August when electricity demand is highest. Further, because wind turbines are so unreliable, they cannot substitute for the reliable generating capacity required to meet growing electricity demand or replace old generating units.
Absent the huge tax breaks and subsidies for “wind farms,” billions in capital investment dollars could be available for more productive purposes.
Perhaps a recent analysis by the US Energy Information Administration (EIA) will begin to “get through to” members of Congress. [x] That analysis shows that subsidies for wind energy in 2007 averaged over all the electricity produced by wind turbines in 2007 results in an astounding federal subsidy of more than 2.337 cents per kilowatt-hour – an amount that is more than 2 ½ times the averaged delivered price of electricity in the US in 2007 of 9.14 cents per kWh. [xi] EIA’s analysis did not include state subsidies.
Wind energy is a clear example of the great power of lobbyists and the lack of representation in Washington DC and state capitals for the interests of ordinary citizens, taxpayers and consumers.
Glenn R. Schleede
18220 Turnberry Drive
Round Hill, VA 20141-2574
540-338-9958
Endnotes:
[i] Joint Committee on Taxation analysis of H.R. 3221 as passed the Senate on April 10, 2008. http://www.house.gov/jct/x-33-08.pdf
[ii] Chris Baltimore, Billionaire Texas oil man makes big bets on wind. http://news.yahoo.com/s/nm/20080418/us_nm/usa_oil_pickens_wind_dc
[iii] Assuming a 35% capacity factor, 4,000 MW of wind capacity would produce about 12,264,000,000 kWh of electricity per year or 122,640,000,000 kWh during the first 10 years of operation.
[iv] Referred to by the IRS as Modified Accelerated Cost Recovery System (MACRS). See IRS Publication 946.
[v] Note also that the US Congress, in the Economic Stimulus Act of 2008, added a 50% 1st year “bonus” deduction for 2008 investments. The effect of this additional “bonus” would permit “wind farm” owners to deduct 60% in the 1st , 16% in the 2nd, 9.6% in the 3rd, 5.76% in the 4th and 5th and 2.88% in the 6th tax years.
[vi] Texas Statutes § 171.107; http://www.seco.cpa.state.tx.us/re_incentives-taxcode-statutes.htm#171107
[vii] http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=TX03R&state=TX&CurrentPageID=1&RE=1&EE=0
[viii] http://www.ercot.com/meetings/board/keydocs/2008/B0415/Item_6_-_CREZ_Transmission_Report_to_PUC_-_Woodfin_Bojorquez.pdf
[ix] Enough transmission capacity must be available to handle the full rated capacity of the wind farm but wind turbines produce electricity only when the wind blows in the right speed range (start producing around 6 mph, achieve rated capacity around 32 mph, cut out around 56 mph. Thus the output is intermittent, highly volatile and unreliable, with the turbines often producing less than rated capacity or not at all.
[x] Wall Street Journal, May 12, 2007, p. A14; EIA, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/index.html
[xi] EIA, Electric Power Monthly, March 2008, Table 5.3, page 105.
Download “Pickens wind farm shows why PTC should not be extended”
Source: Rock County Tax-Payers for a Better Renewable Energy Plan
Buy America! and Kids Sleeping — wind turbine graphics
Source: Eric Moon
Top 5 reasons industrial wind is a good idea — radio ad
This witty 60-second radio ad is generously provided for free use by any opposition groups who want to use it.
Listen to “Top 5 reasons for industrial wind”
Source: Don Hendershot
Wind forum
This column will be a posting of 13 questions/issues regarding wind power. We are seeking answers and or responses from interested lay people and from those with experience in and/or knowledge of any/all aspects of windfarms, and/or siting windfarms.
As noted in previous columns, we would prefer your responses be emailed either to me — ddihen1@bellsouth.net or SMN at info@smokymountainnews.com or both (again preferred). Please put “wind power” in the subject line. If you do not have access to email, please mail your response to SMN — Wind Power, P.O. Box 629, Waynesville, N.C., 28786, or fax (again prominently noting “wind power”) to 828.452.3585. All correspondence must include a name and contact information. Plus, we would like a short bio or introduction from respondents noting what experience you have with wind power. It can be anything from “I’m an engineer who designs turbines” to “one was built next door to me.”
Smoky Mountain News reserves the right to edit your answers/responses for context and length. We want readers to be able to compare apples to apples. For those who would like to see their responses published in their entirety please note that and we will make arrangements to print them in the opinion section of SMN and/or on our Web site.
Questions follow in no particular order:
• What are the criteria used to distinguish between small, medium and large-scale windfarms?
• Is there an average or “ball park” figure when it comes to measuring how much land is required for a windfarm?
• What is meant by peak capacity?
• How often do wind farms operate at peak capacity?
• Is there a problem to be addressed regarding what many people describe as the intermittent (only works when the wind blows) nature of wind power?
• Is this problem being addressed? How?
• Are there valid wildlife issues such as bird and bat mortality, regarding the placement of wind turbines?
• Can these issues be mitigated? How?
• Is noise a problem?
• Should windfarms be sited in national forests?
• Are subsidies for the production of wind power appropriate?
• What impact will wind power have on greenhouse emissions? On other forms of pollution?
• Some local governments have been prompted to come up with ordinances regarding the siting of wind turbines. Are these types of ordinances needed? If so, what should their primary focus be?
There are other questions/issues. We will start with this “baker’s dozen.” Please respond to as many or few of these questions as you would like. We will begin posting responses on May 21. At that time we will also outline a format for the responses and let readers/respondents know how to keep abreast of the forum.
The Naturalist’s Corner
By Don Hendershot
Download “Rocky Mountain News Wind Forum Questions”
Source: Don Hendershot
The Naturalist's Corner: What goes around
Are wind turbines the Galtesque motor that would drive the world to clean, unfettered energy, torpedoing the corporate, collectivist stranglehold of Big Energy. Or, are they sleek and powerful diversions spawned by Big Energy and loosed upon the landscape to draw the lance from the heart of the beast demanding quixotic crusaders spend their time and energies tilting here and yon as the status quo hums along?
We want to know what you think. We want to know what questions and/or concerns you have regarding windpower in general and the placement of wind turbines along the peaks and ridges of the Southern Appalachians.
We asked for your input in this column back on 4/2/08. We have received a number of emails. Some of the concerns and/or issues raised include the following (paraphrased): effects of wind turbines on viewsheds in the mountains; research and information about small-scale, home-owner windpower; any way to arrive at a cost-benefit analysis?; how many acres would be used; noise pollution; cost and politics of transmission of wind generated power across the power grid and the effectiveness of land use planning and/or zoning (primarily height restrictions) as a deterrent to wind turbines. Do you have other/different concerns?
We are going to collect email and/or written questions and comments for another week or so. We would prefer your concerns be emailed either to me – ddihen1@bellsouth.net or SMN at info@smokymountainnews.com or both (again preferred). Please put “wind power” in the subject line. If you do not have access to email, please mail your concerns to SMN – Wind Power, P.O. Box 629, Waynesville, NC 28786 or fax (again prominently noting “wind power”) to 828.452.3585. All correspondence must include a name and contact information.
After this last round of comments is received we will review all and come up with a list of questions and/or issues that readers would like to see addressed regarding windpower and the placement of wind farms in the Southern Appalachians. We will run these questions/issues in an upcoming Naturalist’s Corner (probably 4/30) and ask for your responses. We will also ask for responses from knowledgeable people in the wind industry and those who oppose wind farms.
We are seeking to compare apples to apples. We hope to provide useful accurate information that individuals can use to educate themselves and come to an informed decision regarding windpower in general and the placement of wind turbines in the Southern Appalachians. If you have tried to research this issue you have probably been able to find a lot of information but not easily compared information. For example, how much area is required for a windfarm? Proponents of wind farms often talk about the footprint of a wind turbine – the actual area occupied by the structure itself – while opponents will include this plus spacing between turbines, plus ingress and egress and the area for other infrastructure like transmission lines etc. We think it would be useful to have this kind of information available in a format that would allow a direct comparison.
Remember to get the answers you’re looking for you need to send us your questions.
Don Hendershot can be reached at ddihen1@bellsouth.net
smokymountainnews.com
Source: Save the Prairie
Oklahoma print and radio ads
What You Should Know About Wind Energy (PDF)
Wind turbines threaten northwest Oklahoma (MP3)
Wind energy needs regulation to protect northwest Oklahoma (MP3)
Source: Rock County Tax-Payers for a Better Renewable Energy Plan
Media Tips
Getting media coverage is surprisingly easy, but it requires being diligent about contacting media every single time you see an article that is related to industrial wind plants in your state.
FIRST
I would go to the local NPR and other radio websites and send an email to every one of the hosts of the local talk shows.
The email should be brief.
All it needs to say is that you have a story that is not being covered in your state media and you’re hoping that someone at the local station will be willing to look into it.
It’s OK to send the same email to all of the hosts.
Tell them where you are writing from, give three main points of your story ,and ask someone to call you. Give your phone number.
Be ready to provide other names of people they can speak to.
SECOND
Every single day you need to go wind-watch.org to look at the day’s news postings.
Any time you see a national news story or a story about your state, go to the source of that story (National Wind Watch always provides the link at the end of the story) and:
1. Leave a comment if they are accepting comments (usually there is an option at the end of the article. It requires that you register but that’s not much trouble) The comments should be 250 words or less.
2. Contact the reporter who wrote the story — their email address is usually listed right under their name.
- Thank them for covering the issue.
- Ask them if they know about another angle on their story.
- Give them that angle (your side of the story).
- Tell them you’d be happy to talk to them about it and may know of others they can contact.
- Give them your phone number.
The most important thing to know when you contact a reporter is that they are usually overworked people on deadline and they report what they know. The wind industry, developers, and lobbyists are good at contacting the media. You can make up the difference by being dedicated to doing the same.
So if a reporter writes something that makes you angry, you must give them the benefit of the doubt. There is a very good chance they don’t know the other side of the story. If you can present it to them as a “tip” you will have a much better chance of getting some coverage than if you write an angry letter to the editor about their article.
3. Do write letters to the editor! You’ll need to make them 250 words or less. You don’t have to live in the area where the article is printed to write a letter to the editor. Again, you want the newspaper to stay on your side, so when you write your letter, just give the other side of the story. There is no need to condemn a reporter or the newspaper; this is the mistake a lot of people make.
You can comment on articles from all over the country. Leaving comments no matter where they are does a lot.
Every single person has the right to contact the press and to tell you the truth they rely on us to do so.
Lastly, don’t feel downhearted if you don’t hear back from them. It’s like fishing. Mostly you don’t get a bite but sometimes you land some big ones!
The more people who contact the media, the better, so spread the word.
Source: Rock County Tax-Payers for a Better Renewable Energy Plan
The Elephant's Still in the Room
Another graphic from Better Plan, Rock County:
It is also available in high resolution for print use and can be modified for use by other groups.
Source: Jane Davis
You couldn't make it up!
I know that many of your friends follow our story with interest, so here’s the latest “episode”.
The District Council undertook a period of monitoring at our home last October. They came to measure the noise for an hour a night on 26 nights. On the basis of this they decided that there was no statutory noise nuisance, and although there were three minor breaches of the planning permission they did not feel it appropriate to prosecute. This “result” then went into the public domain and was published widely as a result of being incorporated in a BWEA release to its members. (Although no mention was made of the three minor breaches.) Statements based on this release were then submitted as proofs of evidence to several planning Inquiries across the UK. Some other statements, based on this information — but going further and attacking us personally for having hypersensitive hearing have also been sent to Development Control Council members in various Local Authorities, who were due to discuss planning applications in their own areas!
We complained to the Ombudsman about the way the whole noise complaint has been handled, and she has yet to report on this. However more information came to light last week when it became obvious, that for whatever reason, the turbines were only operating for a third to a half of their normal output last October. Thus all statements etc are based on flawed information and as no other month in the whole of the wind farm’s operation has ever been so quiet it is no wonder that the Council were able to decide that there was not a statutory nuisance … and yet there were still 3 breaches of condition.
As I said you really couldn’t make it up could you?
And we still have lost our home.
Jane Davis
Source: David Bellamy and Mark Duchamp
Birdies bye bye
We have received the following message from Israel:
“Following a press release last week it seems that several of the leading industrial companies in Israel are going to enter the wind business. These are deeply connected to leading politicians. Our ministry of environment is quite hopeless. The future seems bleak.”
From Gibraltar, from Sicily, from the US, Japan, Australia, New Zealand, Mexico, and now from Israel, day by day more bad news comes in from the main bird migration flyways of the world. For windfarm developers think nothing of erecting their wind turbines in migration bottlenecks. Wind speed and maximisation of profit is their main concern.
Birds are killed by the large blades, whose tips revolve at speeds exceeding 100 mph while deceiving the victims by an appearance of slowness. In Sweden, one wind turbine is reported to have killed 895 birds in one year [ref: California Energy Commission, A Roadmap for PIER Research on Avian Collisions with Wind Turbines in California, Dec. 2002, quoting Benner et al. (1993)].
They also get killed by the powerlines, which are built next to each windfarm to carry puny amounts of this very expensive, intermittent electricity to the grid. According to the report “Protecting Birds from Powerlines”, high tension lines may kill over 500 birds per km per year in migration zones [ref: Convention on the Conservation of European Wildlife and Natural Habitats -- Birdlife International (2003)]. Smaller windfarms may not require high-tension lines, but overhead cables are still needed to connect to the distribution network, and they, too, maim and kill birds that collide in the fog, or at night, or while fleeing some danger.
In short: if someone wanted to set about exterminating the world’s migrating birds, placing windfarms in migration hotspots would be looked upon as best practice.
We are not doing any better in the UK. For instance, the “Bird Sensitivity Map to Provide Locational Guidance for Onshore Wind Farms in Scotland” designates practically the whole of the Western Isles as highly sensitive — except for two areas, one of them being the site where a windfarm project is seeking approval (Pairc).
Yet the Pairc environmental statement predicts the possible death of 66-165 golden eagles as a result of collisions with the giant blades. No other project in Scotland declares that it may kill so many eagles; and the subject of migrating birds is poorly addressed. The applicant for the Pairc windfarm is Scottish & Southern Energy.
The same map marks the whole of the Shetlands as highly sensitive, except for a few tiny yellow spots — presumably where Scottish & Southern Energy plans to erect more wind turbines. How on earth will migrating birds be able to avoid the giant rotors when adverse winds push them towards one of these “yellow spots”? or when they fly or make landfall at night? Yet a bird society is actually supporting a large windfarm project on Shetland. Don’t they know the island is a crucially important staging post for migrating birds?
Until these and many other pertinent questions are answered by the ornithological fraternity, we ask that all those who cherish Britain’s heritage of migratory and other birds ask their favourite bird society why windfarms are allowed in migration corridors, e.g., in the Hebrides or in the Shetlands. Also ask your electricity suppliers how much of the electricity supplied to your homes comes from wind. Details from BWEA’s web site indicate that windfarms supply only 1.5% of Britain’s electricity. Then ask yourselves if the slaughter of our birds is really necessary, and join the thousands who are already campaigning against the erection of these wind monsters across Britain.
March 26th 2008
Professor David Bellamy
Mark Duchamp