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April 3 2013

Throwing Tax Dollars into the Wind

Emily Wismer

 

Renewable energy receives 6.4 times the subsidies that fossil fuels receive, and wind energy companies are among the administration’s friends that get the most of these taxpayer dollars.

However, wind energy production is an impractical solution that produces inconsistently, usually when electricity users need it least. It makes up a small portion of domestic electricity production, but that hasn’t stopped the federal government from eagerly doling out taxpayer dollars to wind producers.

The administration is so eager, in fact, that they are getting pretty sloppy with our money. The Government Accountability Office reports that in 2011, nine federal agencies oversaw 82 wind-related initiatives that disbursed taxpayer dollars. Of those, 68 overlapped.

According to the House Committee on Science, Space, and Technology, the reports key findings include:

  • Nine different federal agencies implemented 82 different wind-related initiatives in FY11. Together, the initiatives incurred about $4 billion of federal support—$2.9 billion in wind-related spending obligations and $1.1 billion in wind-related tax subsidies.
  • Almost half of the initiatives (39 of 82) have been launched since 2009, and most (68 of 82) overlapped with at least one other initiative.
  • GAO identified ten different initiatives that have provided or could provide duplicative support to deploy wind facilities. For example, a single wind project could receive federal support from a Section 1603 grant, accelerated depreciation, and a DOE loan guarantee, along with state support from tax incentives and indirect subsidies due to a state Renewable Portfolio Standard.
  • According to financial professionals, federal initiatives have provided cumulative support worth about half of the capital costs for many wind projects. 
  • GAO also found that “it is it is unclear if the incremental support some initiatives provided was always necessary to build projects. In the event that some wind projects receive more federal funding than is required to induce them to be built, this additional funding could potentially be used to induce additional projects to be built or simply withheld, thereby reducing federal expenditures.”  GAO recommended that agencies “formally assess and document whether the federal financial support of their initiatives is needed for applicants’ wind projects to be built.” 

Washington has debated deficits, sequesters, and debt long enough. Instead of artificially inflating energy prices, Congress should end this costly handout. Click here to read the GAO’s report in full.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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