HOUSTON – Tea Party activists say it isn’t enough to put their own into office. They need a policy win.
On their list of potential targets: The $13 billion wind-production tax credit.
“It’s wasteful government spending,” said Judson Phillips, founder and president of Tea Party Nation, in an interview with FuelFix this week.
Phillips and others formed a new group in April, called Waste in the Wind, to rally support to kill a tax incentive for wind-power generators he says is a form of corporate welfare that costs taxpayers billions of dollars and creates imbalance in energy markets.
“Warren Buffett is one of the primary beneficiaries,” Phillips said, referring to the recent acquisition of $1 billion in wind power capacity by a utility in the portfolio of Buffett-run Berkshire Hathaway. “He knows a good deal when he sees one.”
Since 1992, the wind tax credit has provided subsidies for renewable energy players to build wind-power capacity. It gave wind producers in Texas – the nation’s largest wind-energy hub – more than $642.5 million in federal tax credits two years ago while taxpayers in the state contributed $248 million to the tax, according to the Institute for Energy Research.
Now, it’s facing an uncertain future. The tax credit failed to make it into the U.S. House of Representatives’ latest budget bill, and in the U.S. Senate – which is drafting its own budget – one Republican lawmaker has proposed killing the credit altogether.
Phillips believes it’s about time. For two decades, he said, lawmakers have been promising the wind industry would thrive once it matured enough to be weaned off the federal subsidies. But last year, after Congress let the subsidies expire, new installations of U.S. wind projects plummeted 93 percent, measured by power-generation capacity, according to Navigant Research.
Phillips, visiting Houston on his way to the 2014 Republican State Convention in Fort Worth this week, says many on the political right are getting tired of waiting for the sector to blossom while big players make money on the tax break.
For all that money, taxpayers could pay for a new Navy carrier and all the planes that go with it, he said.
“The free market produces the best results,” he said. The government, he said, shouldn’t “pick winners and losers in the economy.” He added he’s not sure what the future holds for the wind industry without the subsidies.
“If the tax credit goes away, it can either die or figure out a way to be profitable,” he said.
Others, like the American Wind Energy Association, believe wind will play an integral role in the future mix of power-generation sources, especially now that the Environmental Protection Agency has released new rules expected to cut deep into U.S. carbon emissions and boost reliance on clean energy over the next 20 years.
Meanwhile, Donna Nelson, chairwoman of the Public Utility Commission of Texas, said in a letter to other commissioners the wind and solar sectors are mature enough to survive without the tax credit, which she said should be reduced so wind-energy companies have “skin in the game,” the Associated Press reported Wednesday.