[Editor's note: Sen. Lamar Alexander, R-Tenn., is guest-moderating and providing the question this week. Alexander is a member of the committees on Appropriations and Environment and Public Works.]
Should Congress extend wind power's federal tax credit for six years at a cost of about $50 billion, or instead save the money for clean-energy research and to reduce the federal debt?
The wind production tax credit was created in 1992. It gives wind developers a subsidy that is often equal to or below the wholesale cost of electricity in some markets. This "temporary" subsidy, already extended seven times, expires this month. Wind developers have urged Congress to extend the credit at decreasing levels over the next six years. The one-year extension passed out of the Senate Finance Committee costs $12.1 billion, according to the Joint Committee on Taxation. Some have estimated the industry's proposed six-year "phase out" would cost $50 billion--on top of $16 billion in federal wind subsidies from 2009 through 2013.
This subsidy should not be extended, first, because a government that borrows 42 cents of every dollar it spends can't afford it. Second, U.S. Energy Secretary Chu has testified that wind is a "mature" technology. Third, after 20 years and billions in subsidies, wind produces only 3 percent of our electricity. Fourth, such large subsidies distort the marketplace, making coal and nuclear uncompetitive. Replacing such baseload power with electricity that is produced only when the wind blows is the energy equivalent of going to war in sailboats when nuclear submarines are available. Finally, giant turbines and their power lines strung along scenic mountaintops destroy the environment in the name of saving the environment.
A better idea is to reduce the debt and increase research for solar, batteries, carbon capture from coal plants, more energy-efficient buildings, advanced biofuels, and the disposal of nuclear waste (the U.S. spends only $5 billion to $6 billion annually on energy research). Then let the marketplace decide which fuels can produce enough clean, cheap reliable energy for a country that uses 20 to 25 percent of the world's electricity.
Do you agree or disagree -- and why?