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.