A renewable energy company that is worth $60 billion — and hasn’t paid federal income taxes for the last seven years — is among the country’s largest recipients of federal subsidies. It’s also suing a small Michigan township as it seeks to take advantage of a state law for its financial gain.
NextEra Energy, based in Florida, has filed lawsuits in Michigan against Ellington Township and Almer Township seeking to compel the municipalities to allow its wind turbine towers to be erected. The company has wind farm projects in 19 states and four Canadian provinces and has built more than 8,700 wind turbines in 110 wind farm facilities.
Ellington Township and Almer Township are located in Tuscola County in Michigan’s Thumb region, which has become the state’s battleground over the rollout of industrial wind turbines. NextEra is also seeking a zoning change on the May 2 ballot in neighboring Huron County. A favorable vote could add many more turbine towers to the 473 already there.
The push for additional wind farms in the Thumb is largely due to a Michigan law passed last December that expanded an existing state mandate. The 2016 law increased the percentage of electricity that must be generated by renewable sources from 10 percent to 14 percent. Mandates like this represent an indirect subsidy to companies like NextEra, which also enjoy many direct government subsidies.
NextEra Energy had corporate profits of $21.5 billion from 2008 to 2015. The company paid no federal income taxes on this amount but instead received a net credit of $313 million due to government subsidies.
Almer Township, by comparison, had a general fund budget of $600,000 in 2016.
The analysis of NextEra Energy’s corporate profits and taxes was done by the Institute on Taxation and Economic Policy, a center-left nonprofit. It was published in a March 2017 report, “The 35 Percent Corporate Tax Myth; Corporate Tax Avoidance by Fortune 500 Companies, 2008 to 2015.”
The report stated on NextEra Energy: “Deferred tax benefits explain most of the company’s tax benefits.”
NextEra Energy didn’t respond to an email seeking comment.
NextEra has received about $1.9 billion in federal grants and tax credits since 2000, according to a March 2015 report by GoodJobsFirst.org, an organization that tracks federal subsidies. NextEra was second only to the energy company Iberdrola in collecting federal subsidies since 2000; Iberdrola has received $2.2 billion.
The federal government does not track its subsidies for renewable energy companies on an annual basis. But the wind industry received $5.9 billion in federal subsidies in 2013, the most recent year for which data is available from the Energy Information Administration.
“NextEra may produce wind energy, but its real business is subsidy mining,” said Robert Bryce, a senior fellow at the Manhattan Institute and an expert on the energy sector. “Renewables need subsidies because they aren’t economic in the free market. By subsidizing renewables, the wholesale power markets across the country are getting more and more distorted. The result of those distortions is that other electricity generators — and particularly the nuclear energy generators — are now seeking their own subsidies.”
Editor's note: Ellington Township is the other Michigan municipality being sued by NextEra Energy. The story had an incorrect municipality.