During a time when the federal government has sequestered the American public, bailed out the big boys and thrown the working class off a fiscal cliff, our government continues to support unnecessary subsidies and projects that West Virginia taxpayers can’t afford.
One particular project, the wind Production Tax Credit, has already cost taxpayers $12 billion dollars this year and it will continue to put our energy industries in jeopardy unless Congress allows it to expire at the end of 2013, as planned.
The wind Production Tax Credit is collecting massive subsidies while coal plants are closing and the government is struggling to stay open and pay its own bills.
It just doesn’t make sense.
Originally enacted by the Energy Policy Act of 1992, the wind Production Tax Credit (PTC) expired in July 1999 but it has been renewed, expanded and extended numerous times since, with the most recent revision in last year’s budget agreement.
The PTC is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources. In the case of wind, the amount is 2.3 cents per kilowatt-hour.
Instead of trimming the fat during the recession, Congress made the PTC more generous in 2009 by expanding eligibility from wind turbines in service to those that simply begin construction. The new legislation also permits PTC-eligible technologies to take a 30 percent tax credit or an equivalent cash grant from the U.S. Department of Treasury, in lieu of the PTC.
According to the National Renewable Energy Laboratory, Washington has spent around $8.4 billion on these grants since 2012.
The subsidy, as modified by the fiscal cliff legislation, attaches to a wind farm when it’s under construction and continues for its first ten years of operation. Even after the PTC’s expiration, a wind farm built in 2013 will continue to receive our tax dollars until 2023.
Last year Congress extended the PTC expiration date from December 31, 2012, to December 2013. The Joint Committee on Taxation estimates that the recent extension of the PTC for just one year cost taxpayers well over $12 billion dollars.
Right now, if our West Virginia energy industries tried to subsidize costs on the American taxpayer’s dime before a new up-to-standard coal fired power plant power was online the administration and EPA wouldn’t stand for it.
So here’s the multi-billion dollar question: why is it admissible to shut down our plants while West Virginians foot the bill for wind production tax credits across the country?
It’s not right. It’s time for our leaders to level the playing field for all energy industries and allow the PTC to expire this year as scheduled.
The current wave of EPA regulations are targeted at our natural resources and unless we create a fair environment for all energy to succeed, our jobs and families will pay the price while wind farms continue to cash in.
Subsidies to the wind industry increased 10-fold, from $467 million dollars in 2007 to $4.9 billion dollars in 2010. During the same time frame, oil, natural gas, and coal accounted for 78 percent of U.S. energy production, while only receiving 11 percent of all federal energy investment.
The EPA’s regulatory agenda has made coal’s long-term future in West Virginia uncertain. The approach to diversifying American energy should include all of our domestic resources. It should be fair, affordable, innovative, and competitive. It should create jobs, not take them away. Renewables may play a larger part in producing electricity down the road but until that time comes, the government should stop picking energy winners and losers and end these costly wind subsidies West Virginia taxpayers can’t afford.
The PTC should have ended the first time in 1999. It should have ended any number of times that it came before Congress over the last fourteen years. For the sake of West Virginia, it must end in 2013.
Green is a Democratic state senator from Raleigh County and serves on the Energy, Industry and Mining Committee.
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