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Editorial: Timing is wrong to take away subsidy for wind power

Last modified: 5/13/2014 2:37:27 PM
The national transition away from fossil fuels and toward an increasing reliance on power from the wind and sun has been becalmed by the expiration of the Production Tax Credit, a 2.3 cents per kilowatt hour subsidy granted wind power generators.

Some argue that the subsidy, first offered in the 1990s to stimulate the development of alternatives to coal and oil energy, has outlived its usefulness. It’s time, they say, for power from wind turbines to compete in the marketplace on an equal basis with other sources, including natural gas. We say, not yet. Instead, Congress should restore the wind power subsidy, and do so quickly before factories producing wind turbines are idled or closed and jobs lost.

The subsidy’s expiration three months ago oddly coincided with a drastic and costly increase in the price of the natural gas that fuels most New England power plants. New Englanders, according to the regional power grid’s operators, spent almost as much for electricity during December, January and February as they did for all of 2012.

The spike in electricity costs forced paper mills in New Hampshire and Maine to close temporarily. The region’s economy suffered because home heating costs sucked up the disposable income of many households. The price increase was not caused by a shortage of supply but by a lack of pipeline capacity to bring the gas to north. That problem should be rectified in time, but natural gas is not an environmentally benign fuel. Burning it produces greenhouse gases, though not nearly in the quantities that result from burning coal or oil, and the long-term impact of the hydraulic fracking used to gain access to the gas is uncertain.

Wind power, which is not without its own problems, pollutes far less, and its use reduces the region’s overreliance on natural gas.

The use of subsidies to foster the development of green energy sources like solar and wind power is still necessary. But both technologies have evolved to the point where they could compete head to head with power from almost any other source if the subsidies given those sources were also withdrawn. Most of those subsidies come in the form of “externalities,” primarily unaccounted for environmental and health care costs.

A Harvard Medical study recently pegged the full cost to the U. S. public of mining and burning coal, for example, at $500 billion annually, but the damage can’t be measured in money alone. Burning coal aggravates conditions like asthma and shortens the lives of those who breathe its unburned particles. Factoring in the true costs of burning coal, the study said, would triple the price of electricity produced by coal-burning power plants.

Oil, too, enjoys a host of subsidies. Most of them are unnecessary but fiercely defended by the industry and its lobbyists. Biggest of all may be the subsidies granted nuclear power plants, an industry that wouldn’t exist if taxpayers didn’t foot the insurance bill.

In a perfect energy world, all externalities would be accounted for and all producers would compete on an equal footing. The situation, however, is a long way from perfect.

The subsidies for green energy, including wind power, should be eliminated, but not until Congress imposes a tax on the carbon emissions that are driving global warming. Taxing carbon would instantly make wind power economically competitive without a subsidy. Congress should tax carbon and New Hampshire’s congressional delegation should back the effort. Until it does, however, subsidies like those granted wind power should remain in place.


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