Hardworking Iowans didn’t elect our members of Congress to enact policies that distort the energy market – but that’s exactly what Congress is about to do. The main federal support for wind energy is scheduled to expire at the end of 2012, but there is a proposal in Congress to extend it. Iowa’s own Sen. Chuck Grassley added language to a bill coming out of the Senate Finance Committee that would extend and dramatically expand the wind production tax credit.
Republicans try to paint the picture that they are the party of limited government and fiscal restraint, but many of their policies do exactly the opposite. Grassley’s long-time support for wind energy incentives is a prime example. Extending the production tax credit would cost taxpayers $12 billion in 2013 alone.
Wind gets an enormous amount of subsidy for very little production, compared to other forms of electricity generation. Of the total federal financial support for electric power in 2010, 42 percent went to wind power, even though it generates only 2.3 percent of our electricity.
State governments support wind energy, too. Like many other states, Iowa has a purchase mandate, meaning that power grids are required by law to buy certain amounts of electricity from wind power and other renewable energy sources. Iowa’s forced usage of renewables began in 1983. Now utilities in Iowa have to maintain 105 megawatts of renewable generating capacity. In 2001, then-Gov. Tom Vilsack set a voluntary goal of 1,000 megawatts on top of this standard.
The wind industry says that it needs the help in order to get off the ground, but just how much does it need? The production tax credit started in 1992. If 20 years of tax breaks and state purchase mandates didn’t do the trick, then what will?
The fact that wind power relies so heavily on a leg-up from government shows that wind power is just not economically viable. We see wind power continue to break its promises of long-term job creation, economic activity and affordability. In fact, a recent study shows that the federal subsidy for wind is so generous that some areas are running negative electricity rates, meaning that the wind industry is actually paying people to take their product.
Iowans deserve energy solutions that can make it on their own in the marketplace – not ones that have to be propped up by government indefinitely. Technologies should show their value through competition in the marketplace – not by getting special favors from their friends in Washington.
If our elected officials were serious about protecting jobs and keeping energy bills low in Iowa, then they should let the wind production tax credit expire.
Iowa is home to over 20,000 Americans for Prosperity activists. Our members of Congress should know that we will watch to see how they vote on this issue. Extending wasteful subsidies is not why we sent them to Washington.
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