Why does Iowa continue to provide property tax breaks and transferable tax credits to industrial wind developers when the state has already reached its renewable energy goals?
Many countries and several U.S. states have stopped providing subsidies for wind development because it drives up electricity rates, wastes government resources and has a minimal impact on climate change.
Denmark, which has invested heavily in wind power, has the highest electricity rates in the developed world. Germany, also a country that invested greatly in industrial turbines, saw its electricity rates double in 10 years.
Iowa’s electricity rates rose nearly six times the national average from 2008-2013 (See Forbes magazine, Oct. 2014) as industrial wind turbines spread across our state. This steep rise in utility rates is challenging for impoverished Iowans, our seniors living on fixed budgets, small Iowa businesses and makes it difficult to attract good-paying industrial employers to our state.
As if these drawbacks were not enough, industrial turbines require a great deal of tax incentives, which wealthy wind developers exploit for personal gain. Virtually all the millions of dollars of Iowa tax credits provided to wind developers are transferred to third parties so they can reduce their tax bill. Billionaire Warren Buffett for example, owner of MidAmerican Energy, the single largest investor of wind energy in Iowa, has enjoyed hundreds of millions in federal and state tax breaks due to wind energy development. Mr. Buffet is taking advantage of Iowa’s wind-friendly policies to reduce his taxes. He admitted to shareholders in May of 2014, “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate … For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
He is right – wind power makes no sense – Iowa’s approximately 3200 turbines reduce 8.7 million metric tons of carbon each year. While this sounds impressive, it represents only .00087 percent of the global carbon output. This token climate impact and Mr. Buffet’s moneymaking investment in wind energy is twice-paid for by hard working Iowans.
First, we are paying rapidly rising electric rates to offset the infrastructure and inefficiencies of wind power. Second, we forego property tax revenue and give away Iowa tax dollars to wealthy wind developers so they can reduce their taxes. These moneys could support underfunded Iowa schools and mental health facilities.
It’s time to stop the skyrocketing electricity rates in Iowa. It’s time to stop the manipulation of our tax funds by wealthy wind developers. It’s time our Iowa tax dollars support our most vulnerable Iowans – our children and our citizens in need of care. I fully support renewable energy that makes sense, but industrial turbines are not the answer. I support ending all Iowa and federal tax breaks for industrial wind.
• Terry McGovern is a retired U.S. Air Force Lieutenant Colonel and business professor at Clarke University in Dubuque. These comments represent his personal views and not necessarily those of his employer.
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