Congress must end the Production Tax Credit that the wind-power industry has enjoyed for too long.
Renewed six times since its 1992 enactment, the credit is again set to expire at 2012‘s end. Making a cogent case for letting it do so — thereby limiting its further cost to another $12.2 billion over a 10-year phase-out — is Bonner Cohen, senior fellow of The National Center for Public Policy Research.
“What began as a temporary helping hand” for the industry “has become a permanent fixture” of its business model, he writes. Besides wind being an “intermittent and unreliable” energy source and an America $16 trillion-plus in debt being unable to afford “propping up” the industry, he says the credit should end because:
• Wind power has a guaranteed market, with 29 states mandating that a certain percentage of their energy come from renewable sources. Thus, the industry doesn‘t need the tax credit to survive.
• The credit forces 80 percent of the country — states that are wind-poor and/or lack renewable-energy mandates — to subsidize wind energy in the other 20 percent.
• The tax credit distorts the wholesale electricity market by incentivizing wind-power sales “at a loss to earn enormous tax subsidies.”
Mr. Cohen also says the industry‘s insistence on the credit‘s necessity is “a revealing vote of no confidence … in its own future.” Congress, too long wearing blinders, should take the cue.