Library filed under Taxes & Subsidies from Texas
With the completion of Texas’ $7 billion Competitive Renewable Energy Zone project, there are now more transmission lines than needed. That has enabled developers to sell their power at higher rates and brought the practice of selling electricity at zero or negative to a virtual halt.
“Once this deadline passes in December, it definitely puts uncertainty on future projects,” he said. “Instead of laying folks off and contracting our spending, we’re simply moving to other markets. “Canada, Mexico and South America are pretty busy right now. Pretty much everything except for Europe is open to more wind energy right now.”
In this paper, Joseph Cullen quantifies the emissions offset by wind power for a large electricity grid in Texas using the randomness inherent in wind power availability. When accounting for dynamics in the production process, the results indicate that only for high estimates of the social costs of pollution does the value of emissions offset by wind power exceed cost of renewable energy subsidies. An excerpt of Mr. Cullen's paper is provided below. The full paper can be downloaded from this page.
"[the wind industry] still faces uncertainty in the medium and long term and needs Congress to address that next year ...The legislative vehicle could be tax reform, an extenders package or something else, but ultimately our industry will begin to feel the impacts of uncertainty in 2014."
“Although we discuss states and regions as 'net takers' and 'net payers,' we note that the ultimate takers are actually the owners of wind facilities — a very concentrated group,” it said. “The payments to the wind producers come at the expense of all taxpayers everywhere,” the report said.
So how would Texas wind power fare if the 2.3-cent-per-kilowatt-hour incentive lapsed? That would depend on how long the credit is unavailable, observers say. But for a couple of reasons, the effect probably won't be as harsh as in past uncertain times. Jeff Clark, executive director of the Austin-based Wind Coalition, said he's not too worried about the ticking clock. “There's a lot of projects in the pipeline right now,” he said.
Timmins detailed the flow of money from the State Energy Conservation Office to the city of Jonestown to CM Energies to Central Texas Plastics and then back to Malouff's company. She said Central Texas Plastics submitted vouchers totaling $965,000 for work and materials but then sent most of the money -- $670,000 in checks -- back to Malouff's company.
Ironically, while taxpayers and utility ratepayers are being hammered coming and going to subsidize alternative energy and efficiency programs, the most reliable and cost-effective energy sources, fossil fuels, are the brunt of both political scorn and proposed tax increases. ...State legislators should press for those answers. We may be surprised at how much we spend for how little we receive.
As the session progresses, renewable energy advocates are bracing to defend critical policies that have helped Texas become the leading wind-power state. The ascendancy of the Tea Party, an abundance of cheap natural gas and tighter budgets have reduced the sway of the wind industry. Solar power advocates anticipate limited gains at best.
"The PTC [production tax credit] is helping projects that are ready to go, that are shovel-ready, but the thing that is hurting the industry is really low gas prices that make it fairly hard to obtain financing," said Jimmy Horn of Horn Wind Energy.
The wind energy industry is dependent on something even more unpredictable than wind: Congress. Hidden in the turmoil over the "fiscal cliff" compromise was a tax credit for wind energy.
Sweetwater Mayor Greg Wortham, executive director of the Texas Wind Energy Clearinghouse, said he was unimpressed by the one-year extension of the tax credit. He estimated 40,000 wind energy jobs have been lost as companies have halted production, not put up turbines across the state and wait to see what Congress does with the tax credit.
Expiration of the credit would have a significant impact on development of about 80 turbines near Petronila in Nueces County, said Patrick Woodson, chief operating officer for Germany-based E.On Climate & Renewables in North America. The company wants to build in 2013.
Some wind experts think the credit extension will ultimately pass Congress, albeit after the November election ...others do not, and the industry is left to bemoan the difficulty of long-term planning. A one-year extension could mean the wrangling resumes next year. Hornaday said that Texas could benefit more than other states from a one-year extension because there are fewer rules here, making wind farms easier to build.
"Federal incentives for renewable energy, I believe, have distorted the competitive wholesale market" on the Texas grid, Nelson told the Senate Natural Resources Committee. Nelson said she believes those distortions are "one of the primary causes" of the current strains on the grid, and added: "I think we all need to move with extreme caution before adopting any additional incentives or mandates."
Many supporters are optimistic that the credit will be renewed, but doubt it will happen before the November election. And a last-minute deal probably won't prevent mass casualties for the U.S. wind power business. "Most of the damage has already been done," said Matt DaPrato, senior analyst for IHS Emerging Energy Research. "There's going to be a big drop-off in 2013 either way."
Texas has a commanding lead over other states in wind power production, as turbines supply 8 percent of the state grid's power. But the looming expiration of a federal tax credit jeopardizes the boom - and Texas' congressional delegation, for the most part, does not appear to be clamoring loudly to save it.
District Superintendent Christina Gutierrez said the school board has opposed tax incentives because economic losses from military cutbacks or closures could outweigh gains from the wind farm. The Kingsville base employed 597 military and 1,224 civilian personnel in 2010.
EC&R Development is proposing the construction of a wind power electric generation facility in Nueces County Texas. EC&R Development is an active franchise taxpayer, as required by Texas Tax Code Section 313.024(a) and is in good standing. After reviewing the application using the criteria listed in Section 313.026 and the information provided by EC&R Development, the Comptroller's recommendation is that EC&R Development's application under Tax Code Chapter 313 not be approved.
Trent ISD saw values plunge 35.1 percent, while values also slid for the city of Tye, Merkel ISD, the city of Buffalo Gap and Jim Ned Consolidated Independent School District. ...the changes have to do with wind turbines companies showing a tough business year. "The information that was brought to us by the wind turbine companies showed their income was down."