Guest article by Justin Wheating, Chief Financial Officer, NRG Systems
I love the holiday season. Where I grew up in England, Christmas was the major family holiday with a concentration of visits to the pub followed by overeating and naps. The holiday itself was centered on gift giving surprises, food preparation, more imbibing, and attempts to find batteries which were not included with the gifts.
This year for many people the holidays were hard. The news about unemployment and those who are no longer registering for unemployment makes the headlines every week, and uncertainty about the future means that those still employed are cautious about how they spend their money.
Given this, I do not understand why the U.S. government is being so generous to foreign countries. What do I mean? Well, by vacillating on the Production Tax Credit for wind energy, which requires no upfront government spending, Congress is forcing US and foreign firms who want to invest in the U.S. wind industry to look for opportunities overseas. Not only this, Congress is creating a situation where those firms may close their U.S. manufacturing plants in the absence of any development opportunities beyond 2012.
According to the American Wind Energy Association, average annual growth in wind power since the PTC was last allowed to expire is a robust 35%, and during that time the cost of wind power has been reduced by 24-39%. Wind also supports 400 manufacturing facilities in 43 states and 75,000 jobs. This has been achieved despite the cyclical boom/bust created by unpredictable federal policies.
Imagine if we hadn’t lived through those boom and busts – if stable, certain policy support had been in place? We would be well on our way to meeting the Department of Energy’s 20% wind power by 2030 scenario and creating the 500,000 jobs to support our industry.
That would have made a pretty nice dent in the present unemployment numbers.
Now, we should be fair here. As with gift giving to family members, it’s important to give everyone something of equal value and not to show favoritism. So too should the government deal fairly with its energy-producing family members.
The oil, gas and coal companies will receive $40 billion (add 9 zeros) over the next 10 years in direct subsidies. These are long-established permanent subsidies imbedded in the US Tax Code. In addition, they are not required to pay for the “externalities” caused by their extraction and manufacturing processes.
Goodness knows the true cost to the environment and human health caused by oil spills, groundwater poisoning, mountaintop removal, dirty air and radiation! In this respect, renewing the PTC would not even come close to being fair. But, alas the actions of Congress are all too real and Santa Claus is not.
If only Congress could renew the PTC for an extended period of time and give the wind industry a chance to plan properly, I think Uncle Sam would be happy with the result.
Fact check: Heritage errs in supporting job-killing tax hike, December 19, 2011
Fact check: Globalwarming.org ignores energy incentive history, December 19, 2011
Blogger sees PTC extension as 'no-brainer', December 15, 2011
Don't hit wind with job-killing tax hike, December 5, 2011
Fact check: Pompeo and Labrador miss mark with subsidy bill, December 1, 2011
Selective Use of Energy Subsidies is Unfair (letter to editor, Washington Times), November 30, 2011
Red State Energy, Red State Jobs, November 29, 2011
Governors' letter urges prompt extension of wind tax incentive, November 16, 2011
Wind power: Keeping America's lunch money at home, November 14, 2011
Clean energy: A bipartisan goal, November 9, 2011
Nonpartisan Congressional report underscores need for stable wind energy policy, October 3, 2011
Iowa Gov. Branstad cites wind jobs, current and future, September 14, 2011