Articles filed under Taxes & Subsidies from Texas
The wind game is pay to play. Rural counties are enticing companies to invest millions of dollars to build wind farms with tax abatements.
What is Goldman Sachs doing in rural Texas? Probably some of its bankers have wondered that themselves, when they find they're three hours from the nearest latte. One of Goldman's subsidiaries, Houston-based Horizon Wind Energy, is constructing a $600 million, 400-megawatt wind farm in the boonies west of Dallas. Financiers of other wind-power projects and explorations, spread across central and west Texas, include Wells Fargo; JPMorgan Chase; Macquarie, Australia's largest investment bank; and John Deere's credit division, which already has close ties to rural America. To some extent, the lure of wind for such financial powerhouses is obvious. Bankers are always looking for high-growth sectors for investment or loans. Wind fits the bill, as the fastest-growing energy segment in the world. In Texas - which last year passed California to become the largest wind-power producer in the U.S. - the boom is sometimes likened to the gold rush. Energy giants such as BP and Shell are investing heavily too.
In this pancake-flat country, where the wind blows so relentlessly that the sagebrush and mesquite are permanently bent, Royal Dutch Shell Group, BP PLC and a wind-development company owned by Goldman Sachs Group Inc. are racing to lease vast expanses of ranchland. In a bet on wind power's long-term viability, they're planning to erect what would be some of the biggest wind farms in the world, with thousands of wind turbines costing some $2 million apiece.
Texas has surpassed California as the country’s top wind-energy producer, but the new technology is clashing with old ranching ways Texas ranchers have embraced helicopters for herding, wireless Internet access for keeping an eye on the futures markets and microchips for tracking their cattle, but there is one piece of modern technology that is sparking a range war in the vast open spaces of the state — the windmill turbine, which opponents say is noisy, ugly, dangerous to wildlife and a tax boondoggle to boot.
TXU Corp. Chairman John Wilder said “everybody’s mad as a hornet” about Texas’ high electricity rates, but said increased supply of electricity that would come from 11 new coal-fired generating plants TXU wants to build would be the solution to Texas’ increasingly tight electricity supply. Wilder acknowledged that TXU probably won’t be able to achieve significant carbon dioxide emission reductions for years, perhaps as late as 2020, he said, but added “there is no perfect fuel for electricity generation........ Wind power, Wilder said, is inefficient because wind can’t be depended on to blow consistently at the right times “and besides, it costs 12-14 cents per kilowatt hour to make electricity from wind unless it is subsidized by the government.”
Local architect Stephen Colley jumped at the chance to pay more for his electricity on the first day he was able to do so. That's right, he volunteered to pay higher electric rates. So have hundreds of thousands of others around the country, and more are doing so every day, paying a premium to buy "green" energy and reduce the release of greenhouse gases.
Houston-based Reliant has sparked a debate over subsidies that has the EPA, citizens and consumer advocates concerned
In reality, this project should generate for its investors about $2.46 billion over 20 years through the sale of power and Texas renewable energy credits, which are paid by Texas ratepayers. An additional $333 million in federal production tax credits will be added to the revenue stream, along with an anticipated county and school tax abatement (tax forgiveness) generally demanded by all wind project developers of between $125 million and $265 million, depending on the project cost. With the project taking advantage of almost half a billion in tax abatements and credits (some directly out of school district funds and state school funds), lease royalties of only $34 million to $112 million to benefit the state education fund hardly add up to "a good deal." Simply put, Texas public school children, and all Texas residents, will be harmed from a revenue standpoint if the Superior project is built.
he honeymoon is over -- for now -- for Xcel Energy customers who enjoyed a price advantage by using the Windsource voluntary green-power program.
West Texas doesn't have the chance to bring in new industry every day.
County Commissioners approved a reinvestment zone and tax abatement for AES Seawest, Inc., following a public hearing on the matter held Wednesday morning.
The hearing to discuss a tax abatement sought by the developers drew more than 100 people, roughly a quarter of the county's population.
Morris expressed to commissioners that she did not agree with giving a company a tax break. "Give the people of the county a tax break," Morris said.
In June, Austin-based Green Mountain Energy Company – self-described as "one of the nation's largest retail providers of cleaner electricity products," generated from sources such as wind, solar, water, biomass, and natural gas – announced the crosstown relocation of its headquarters from aquifer-sensitive west Austin to an award-winning green office tower downtown, in anticipation of growth and expansion. By the time the move was complete, however, the energy provider had discontinued servicing about 480,000 customers in Ohio and Pennsylvania, laid off 15% of its workforce, and found itself facing suit in federal court. Green Mountain blames regulatory and market obstacles for its woes, but its critics cite an over-reliance on natural gas and a lack of investment in the very clean energy sources the company has made its trademark.