When the calendar changed to 2014, the multi-billion dollar wind energy production tax credit expired, but that doesn’t mean wind companies still aren’t reaping benefits from the taxpayer. When companies secure the subsidy through proof of new farm production, it lasts for 10 years regardless of whether the initial subsidy is renewed by Congress. In other words, wind companies only had to start production in order to claim the subsidy. Further, wind partnerships and investments in farms come from wealthy investors who benefit from government cronyism.
“The wind industry would not exist without a large class of wealthy investors who have figured out that they can get guaranteed returns on their investment,” Myron Ebell, director of Energy and Global Warming Policy at the Competitive Enterprise Institute, tells Townhall.
Knowing there was a chance the subsidy would not be renewed immediately, wind companies stocked up on equipment and submitted plans for new farms in 2013 to secure the flow of money over the course of the next decade. Wind lobbyists have been begging Congress to restore the credit, as they have done with expirations in the past, because the industry quite literally cannot survive without it.
“The production tax credit lasts for 10 years so if you started building your wind farm last year before the credit expired, you’re still going to get it for 10 years once you go into operation. The wind people keep saying, ‘Well maybe we should think about an orderly phase out’ well, we have a phase out it’s going to take at least ten years,” Ebell says.
“Typically a partnership of very wealthy individuals will put one of these deals together and what they will do is count on the 2.3 cents per kilowatt hour and then they will sign a long term contract with a utility in a state that has a mandate and then they will be locked in at a rate of return on their investment, but none of these deals will work unless it’s a guaranteed rate of return and it’s higher than a treasury bill. So it’s a perfect investment if you think part of your fortune should be in bonds because it’s all guaranteed and you get a higher rate of return.”