Dive Brief:
- The self-identified heads “of the nation’s largest coal, natural gas and nuclear companies” called on Congress last week to not renew the federal production tax credit (PTC) for wind energy during the lame duck session.
- FirstEnergy President/CEO Anthony J. Alexander, Exelon President/CEO Christopher M. Crane, and Calpine President/CEO Thad Hill wrote in Forbes that lawmakers should refuse to renew the $0.023 per kilowatt-hour production tax credit (PTC) as a part of a tax extenders package lawmakers will consider when the 113th Congress returns for its final session after the November elections.
- The CEOs argue a PTC extension will cost taxpayers and electricity customers an estimated $13 billion for an established, multi-billion dollar business. The $35 per megawatt-hour pre-tax/$23 per megawatt-hour post-tax subsidy gives wind producers “over double the price that other generators receive in the wholesale market,” they say, and motivates them to over produce, distort the market, and cause negative wholesale prices.
Dive Insight:
Enacted in 1991 to support the growth of the budding wind industry, the PTC was extended for one year at the end of 2013 but, the CEOs argue, that while they “have a deep and abiding commitment to clean and reliable energy, with substantial interests in renewable energy resources including wind, solar, geothermal and hydropower," the PTC has achieved its original purpose of bringing the wind industry to maturity.
Negative pricing due to subsidized wind generation is pushing coal, nuclear, natural gas, and hydropower plants out of business, the CEOs argue, and threatens system reliability. Replacing nuclear plants with wind also increases greenhouse gas emissions, they say, by shifting base load services to fossil fuels.
Critics say the emissions point remains in contention, however, as researchers from the National Research Council have found otherwise in a series of studies. Other reports point to potential cost savings available from from wind generation for consumers.
