The Corner

Wind Tax Credit Keeps on Puffing

The dubious wind-energy tax credit not only survived the fiscal cliff, but has been expanded. The 2.2 cent per kilowatt-hour credit was set to expire on December 31, but wind lobbyists kept the credit going for another year, and managed to adjust it so that any project that begins construction in 2013 can claim the credit, even it doesn’t go online until 2014.

The project is a godsend for many utilities seeking to lower their tax liabilities. “Just simply, 30% of the value of a project is derived from the tax credit,” Florian Zerhusen, chief executive of WKN USA, told the Denver Business Journal. The subsidy is one of the least defensible of all alternative-energy programs, given the environmental damage wind turbines cause to birds and the fact that wind energy can’t be stored and is therefore an unreliable energy ource.

Last week, I reported on the distortionary credit for NRO. Wind-energy advocates had the advantage of high-powered lobbyists (including Quinn Gillespie, the firm founded by former Clinton-administration official Jack Quinn and former RNC chairman Ed Gillespie) and friends in congressional leadership.

A major proponent of wind energy is GOP House majority whip Kevin McCarthy, whose district contains more windmills than any other in the country. McCarthy ultimately voted against the fiscal-cliff deal because, according to an aide, “there was just too much spending in it.” But apparently wind’s outrageous tax exemptions are exempted from his concern. In 2010, the congressman unveiled the WIND (“Wind Incentives for a New Decade”) Energy Act that proposed extending the wind tax credit through 2020.

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