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Alexander offers amendments to strike wind subsidies from tax extenders legislation

WASHINGTON, May 15 – U.S. Senator Lamar Alexander (R-Tenn.) joined Sen. Jeff Flake (R-Ariz.) on the Senate floor to call on Congress to leave expired the wind production tax credit, discussing two amendments they’re filing today to rein in a subsidy Alexander called “the most conspicuous, wasteful taxpayer subsidy in Washington, DC.”

“After nearly 22 years and eight extensions, it’s time for the wind production tax credit to end and let wind stand on its own in the marketplace.” Alexander said on the Senate floor on Wednesday. “Let’s save $13 billion. Let’s stop distorting the marketplace and undercutting nuclear and coal plants. And let’s stop destroying the environment in the name of saving the environment.”

First approved in 1992 to “help an infant industry,” the wind production tax credit has been renewed eight times, now subsidizing what Steven Chu, the president’s former Energy Secretary, calls a “mature technology.” The two-year extension currently being considered would cost taxpayers an additional $13 billion over the next ten years.

Alexander and Flake today introduced two amendments to the tax extenders bill related to the wind production tax credit. The first amendment removes the provision in the bill that would renew the wind production tax credit for two years at a cost of $13 billion over 10 years, allowing the subsidy to remain expired. The second amendment limits the discretion of the IRS when determining eligibility for the production tax credit.

Alexander noted that such a large subsidy undercuts other reliable “baseload” energy, such as coal and nuclear, and natural gas, distorting the marketplace by “making the baseload power we need to rely on for the long term less economical, leading to the closing of nuclear and coal plants.” The subsidy is so generous that, sometimes in some markets, “wind producers can actually give away their electricity and still make a profit,” Alexander said.

Alexander cited a study by the Center for Strategic and International Studies showing that the United States could lose as many as 25 percent of its nuclear plants over the next 10 years. At the same time, Alexander said, it would take windmills stretching the length of the Appalachian Trail from Georgia to Maine to produce the same amount of electricity as eight nuclear power plants, and windmills would only produce electricity when the wind is blowing.