Letters to the Editor

Guest view: Support affordable energy by ending corporate welfare

Here’s a question Illinois’s U.S. Senators and all 18 of its Representatives should answer: Do you support raising state gas and electricity bills by more than $1,100 in the next five years?

That may seem like a silly question. Yet that’s exactly what’s at stake with Congress’s upcoming vote to renew the wind Production Tax Credit (PTC).

The wind PTC, which expired last year, gives wind producers a 2.3-cent tax credit for every kilowatt-hour of electricity produced over 10 years. Since 2008, it has cost U.S. taxpayers at least $7.3 billion. And when combined with other federal subsidies, Illinois taxpayers forked over $908 million to corporate wind facilities between 2005 and 2014, according to a new study by my sister organization, the Institute for Energy Research.

And now, if industry lobbyists get their desired two-year PTC renewal, it will cost another $10 billion in corporate welfare.

Enough is enough. Wind advocates have claimed for decades they wouldn’t need handouts within a few more years—claims that have proven wrong time and again. Wind’s recent history illustrates this reality. When the PTC is active—aka, when the tax spigot is open—new wind installations soar. When it’s temporarily expired and no more tax dollars are available, installations plummet.

That was the case in 2013 when the PTC expired. New installations plunged from an all-time high of 13,000 megawatts in 2012 to just 1,100 megawatts in 2013—a single-year 92 percent drop. Similar declines occurred following previous temporary expirations.

This points to a simple conclusion: Wind companies can’t cut it without taxpayers propping them up. That it’s corporate welfare and drives up energy bills should be reason enough for Congress to oppose the PTC. But this year, there’s another: It’s the only meaningful way for Congress to impede President Obama’s reckless climate agenda.

The centerpiece is the Environmental Protection Agency’s new regulation on power plants. It would force Illinois to cut carbon dioxide emissions by 44 percent by 2030. This will require fundamentally restructuring state energy grids. Economists at Energy Ventures Analysis estimate it will cost Illinois families over $1,100 in higher gas and electricity bills by 2020. After that, NERA Economic Consulting predicts average electricity price increases of 15 percent from 2022 to 2033, peaking as high as 19 percent in a single year.

But here’s the thing: This regulation won’t work without dramatically increasing the use of wind power. In fact, wind is so critical to the regulation’s success that the final version essentially bribes states to offer more subsidies for wind and solar.

This is how the wind PTC and Mr. Obama’s carbon regulation are inseparable. Wind energy can’t survive without subsidies, and Mr. Obama’s carbon regulation won’t work without more wind. Therefore, by leaving the PTC expired, Congress has an opportunity to take the wind out of the president’s climate agenda sails.

It’s a no-brainer, even for Congress.

Thomas J. Pyle is the president of the American Energy Alliance.