January 11, 2013
Blogs, U.S.

Gramm: windmills an eyesore, energy tax credits a waste

By Jim Snyder | Political Capital | Jan. 11, 2013 | bloomberg.com

Phil Gramm, a former U.S. Republican senator from Texas who now advises hedge funds, may have a new role: chief wind-energy antagonist.

Gramm, a fiscal conservative who sought to cut federal spending during his career in Congress, says a tax credit for wind projects is a particularly egregious example of a wasteful federal subsidy. Wind is an unreliable and expensive form of power, and government support distorts the market, taking away capital from more worthy sources of energy like natural gas, he says.

Gramm, who left Congress in 2002, laid out many of these complaints in a Dec. 25 editorial that ran in the Wall Street Journal.

In an interview at his Washington office, Gramm added a fourth count to his list of complaints – wind turbines are an eyesore.

The 1920s-vintage windmill he uses on his Texas home west of San Antonio to draw water is “purdy,” he said, exaggerating his Southern drawl for affect. Modern wind turbines that reach more than 100 meters in the air are not, he said.

“I don’t understand people who love the environment and nature not being offended at how ugly” modern wind turbines are, Gramm said.

Gramm, who said he wasn’t the sort to be inspired to write a couplet by a majestic outdoor scene, said he nevertheless considered a collection of blades spinning – or not spinning – atop vistas in West Texas and other areas to be a form of “sight pollution.”

Gramm, a senior scholar at the American Enterprise Institute, a Washington-based group that promotes free enterprise, is reaching out to reporters to discuss why wind’s tax credit should come to an end. He says he’s motivated by a dislike of government subsidies and that none of his clients produce natural gas, the production of which he says can help revive the economy.

Gramm does work as an adviser to Exelon Corp. The Chicago-based utility opposed extension of a wind production tax credit that was set to expire last year, and was booted out of the American Wind Energy Association as a consequence.

Congress approved a one-year extension of the 2.2 cent per kilowatt hour credit in the budget deal that avoided tax hikes and automatic spending cuts.

The American Wind Energy Association is now looking for a six-year phase-out. The time will give companies the chance to further reduce costs to better compete with fossil fuels, the group argues.

The industry is worth supporting because wind energy doesn’t pollute and has created tens of thousands of jobs, the group argues.

Gramm calls wind was a “hot house industry” that couldn’t stand on its own.