The federal Production Tax Credit (PTC) has proven to be an effective tool to encourage development of American renewable energy projects and foster economic development in all 50 states. Essentially, the PTC is the result of smart bipartisan energy policy that has allowed for a new energy industry to grow.
Recently, however, a number of special-interest groups, funded by other energy industries, have attacked the PTC. Pulitzer Prize-winning reporter Michael Hiltzik recently wrote an expose on these efforts (Blown away by the attacks on wind-power subsidy). As noted previously on the AWEA blog (Opinion: Attacks on PTC extension misguided), the real goal of companies attacking the PTC is to “tilt the playing field back toward the past, not the future."
However, Christine Harbin of the anti-wind lobbying group Americans for Prosperity (AFP) is upset with Mr. Hiltzik’s investigative reporting.
In his report, Mr. Hiltzik calls attention to AFP's strident effort to get the PTC canned while at the same time favoring incentives for fossil fuels and nuclear energy. As Mr. Hiltzik noted, AFP is funded by the oil and gas billionaire brothers Charles and David Koch.
Ms. Harbin’s response to Mr. Hiltzik contains a number of factual errors about wind power and the PTC.
To start, the Production Tax Credit is tax relief, not a subsidy or handout. Unless you assume that all the money people and companies earn in the private sector belongs to the government—something I feel sure the Kochs would not agree with–a tax reduction is different from government subsidies or loan guarantees. A tax credit simply leaves more money in private hands. Also, because the amount of the PTC is based on the amount of electricity generated, it only rewards results, and it doesn’t cost taxpayers a dime.
As Republican operative Karl Rove recently said, the PTC is a market mechanism that doesn't pick winners and losers, but merely creates the incentive for private investment needed by a growing new American industry.
Secondly, while Ms. Harbin says she is for eliminating “all targeted loopholes in the tax code,” her focus of late has solely been on the PTC. The Joint Committee on Taxation identifies at least 12 different tax benefits that are still permanently in place for fossil fuels and have been around for decades, while renewable tax incentives have been extended only 1 to 3 years at a time before being subject to expiration – an approach that has hampered the development of these brand new American industries.
According to a Wood Mackenzie study prepared for the American Petroleum Institute in August 2010, the largest of fossil fuels’ existing tax incentives will provide $36 billion in government tax support over the next 10 years.
The PTC more than pays for itself in a number of ways. According to a NextEra Energy study, extending the wind production tax credit delivers a number of fiscal benefits to government and saves thousands of jobs.
Annually, wind power attracts over $15 billion in private investment. In rural areas, wind power has brought $400 million in annual lease payments to farmers, ranchers, and other landowners. In fact, landowners can realize lease payments of up to $120,000 over a 20-year period for each wind turbine installed on their property.
Wind saves consumers money. Wind power lets utilities lock in prices for 20-30 years and insulates utilities and their ratepayers from fossil fuel price shocks. Wind offers electric consumers the same peace of mind a fixed rate mortgage gives homeowners. A May 2012 Synapse Energy Economics study found adding more wind power in the Midwest would reduce overall energy costs for the average household by $63 to $200 per year.
An assessment by the U.S. Department of Energy during the George W. Bush Administration found that wind could supply 20% of the nation’s electricity by 2030. That would support roughly 500,000 good quality jobs in the U.S., with an annual average of more than 150,000 workers directly employed by the wind industry.
The PTC must be extended in order to further the development of a burgeoning industry, protect tens of thousands of jobs, and provide important savings for American consumers.
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Fact check: Exelon-funded report inflates wind integration costs, November 2, 2012
Fact check: Reason Foundation FAIL on wind and emissions, October 11, 2012
Fact check: Free Beacon's Stiles blasts wind incentive, gives others a pass, October 4, 2012
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Fact check: WSJ stumbles with PTC-bashing editorial, May 15, 2012
Fact check: Heartland's Kaminsky misguided on wind incentives, April 19, 2012
Fact check: Missteps by Mauldin in PTC bashing, March 26, 2012
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