The wind energy credit: A shafting grows
The “fiscal cliff” deal shafts all taxpayers — not just “the rich” — by not just renewing the wind energy Production Tax Credit (PTC) for another year but expanding eligibility, too.
Formerly available only to projects completed during a particular year, the PTC now is available to projects begun by 2013's end, in keeping with industry claims that windmill construction usually takes more than a year.
Thus, even more will be squandered this year than the nearly $12 billion that the Joint Committee on Taxation estimated a simple one-year PTC extension — without expanded eligibility — would have cost. But as former U.S. Sen. Phil Gramm, R-Texas, wrote in The Wall Street Journal, “the cost to taxpayers is only part of the problem.”
Subsidies are so high that producers who pay utilities to take their windmills' electricity still can profit. Coal-, gas- and nuclear-fired plants still have to meet demand when winds don't blow. And the Department of Energy says average wind-power costs in 2009 still were higher than in 1994, two years after the PTC began.
“Like all subsidies, these distort markets and make the country poorer — all in order to enrich a handful of politically influential businesses by shielding these privileged firms from the realities of the marketplace,” says Donald J. Boudreaux, a George Mason University economist and regular Trib columnist.
As the PTC's ill wind blows harder than ever, its cost chills taxpayers even more.