ANALYSTS: Extending Wind Subsidy Could Cost Jobs in Other Sectors

November 29, 2012
By

LESSER: “Wind energy is like a (bad) vending machine. When you are most hungry [for power], you get the least amount”

WASHINGTON – Energy policy analysts say extending a federal subsidy for wind production might save jobs in Colorado, but also might eliminate an equal number of jobs elsewhere.

Speaking at a think tank Tuesday, the experts challenged the pronouncement that wind-energy executives have claimed that unless the federal wind production tax credit is extended, 6,000 Coloradans will be thrown out of work.

David W. Kreutzer, a research fellow in energy economics and climate change at the Heritage Foundation, said that “(w)hile extending the credit would be a job creator for some employees, it would not transfer to 6,000 other jobs in the economy.”

David C. Brown, a company lobbyist for the Exelon Corporation, noted that the federal government’s subsidy to the wind-energy industry was partly responsible for the shutdown of a coal plant in Montana.

The chief operating officer for PPL Montana, the company that owns and operates the J.E. Corette power plant in Billings, in September said the wind production tax credit allowed energy companies to pay customers to take their power, undercutting the market for coal. Thirty-five workers at the plant are expected to lose their jobs.

The Heritage Foundation sponsored the panel discussion, “Let Wind Compete: End the Production Tax Credit.” The event was held little more than a month before the wind production tax credit, a federal subsidy of $22 per megawatt hour on wind energy, is set to lapse unless lawmakers approve an extension.

President Obama and many House Republicans have emphasized the economic necessity of the credit, saying that continuation of the subsidy will prevent job losses in the wind-energy industry.

The economic argument for the credit has been influential even among Colorado Republicans who won their elections two years ago with significant conservative support.  Both Rep. Cory Gardner of Yuma and Scott Tipton of Cortez, whose districts have wind-energy manufacturers, have said they would support the subsidy to prevent expected job losses in the event it is allowed to expire.

Although supporters say Congress is likely to extend the subsidy, they have yet to come to an agreement.  One stumbling block has been related to negotiations over reducing the federal debt. Extending the credit would cost the federal treasury $12.2 billion over ten years, and both Gardner and Tipton have indicated they would not support the subsidy unless negotiators can find spending offsets.

Concerns about the nation’s mounting debt were not far from the minds of the panelists at the Heritage Foundation. When Brown of the Exelon Corporation was asked what he would do with the $12.2 billion that would go to the wind-energy industry if the subsidy is extended, he said “deficit reduction.”

Jonathan A. Lesser, a contributing columnist and editorial board member for Natural Gas & Electricity, made remarks that served to elaborate on Brown’s point that federal dollars for the wind-energy industry would be spent better elsewhere.

Lesser emphasized that wind power is an unreliable source of energy for contributors. He noted that when Chicago endured 103-degree temperatures last July, wind turbines in Illinois supplied power to generate no more than 4,000 hair dryers.

“Wind energy is like a (bad) vending machine. When you are most hungry, you get the least amount,” said Lesser.

Supporters of the wind-energy industry acknowledge that wind power can be intermittent. They say the problem can be overcome if more windmills are built, spread out, and connected with a strong power grid.

The wind production tax credit is set to expire December 31.

Comments made by visitors are not representative of The Colorado Observer staff.

One Response to ANALYSTS: Extending Wind Subsidy Could Cost Jobs in Other Sectors

  1. Mark Swanson
    November 30, 2012 at 5:04 pm

    I for one have no problem with wind mills, but I do have a problem with government dictating what businesses should survive or fail, because government gave one competitor help. That is NOT the American way as set up by our founding fathers. Businesses should be allow to sink or swim on their own merit, and that is the American way.

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