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TEN RATEPAYER AND TAXPAYER SUBSIDIES
The total cost of wind turbines and transmission upgrades, as envisioned by recently enacted Maine law, will be $7 billion. Via electric rates and taxes, Mainers will pay for this, but it will produce less than 700 megawatts of electricity.
Policymakers in the federal government have determined that certain energy sources are more desirable and less viable than others, so government incentives are granted to various energies. Here are the federal taxpayer subsidies paid by energy source in dollars per MW/Hour:
Natural Gas and Oil $.25
1. Wind projects can take the “cash in lieu of investment tax credit” or the 1.9 cent production tax credit. For example, in 2009, First Wind, Maine’s most active wind developer, took over $100 million of federal taxpayer “cash in lieu” monies. In 2009 $849 million (or 84%) of US subsidies went to overseas companies.
Iberdrola of Spain took $545 million through its American subsidiary. Almost all of the billions of taxpayer dollars spent on US wind projects was for wind turbines, blades, and nacelles which were manufactured in foreign countries.
2. Wind developers also take a federal subsidy of 2.1 cents in renewable energy credit per kilowatt produced. Taxpayers bear this cost.
3. Despite creating imperceptible numbers of jobs, wind projects in Maine routinely get Tax Increment Financing and Community Benefit Arrangements which reduce their property tax obligations, thereby passing on tax burdens to other taxpayers.
4. Wind power is unpredictable, intermittent, and cannot be stored. So it must be used or lost as it is generated. The nature of this electricity requires an overbuilt grid that can handle these wild fluctuations and thermal stresses. Additionally, wind power is sited remotely, far from load (end users) so transmission costs are exacerbated even while electrons are lost in the distance traveled. Utilities build these unnecessary power lines and charge their ratepayers for the cost.
5. The only way that wind power can grow and still preserve system reliability is with grid expansion, like CMP’s $1.4 billion transmission upgrade (MPRP). Ratepayers will pay for this upgrade – as well as similar upgrades in the other New England states – through their electric bills.
6. In order to meet New England’s anticipated 12,000 MW of wind power buildup, the New England ISO forecasts building 4,320 new miles of transmission infrastructure with midrange costs between $19 and $25 billion. Ratepayers will get the bill.
7. Utilities are under pressure to acquire renewable energy (or credits) from wind farms in order to comply with the state Renewable Portfolio Standards. For each missing megawatt hour of renewable energy where the mandated percentages are not met, nearly every state in New England imposes a fee that is collected by each State's Public Utility Commission (PUC). The cost for either the renewable energy credit or the compliance fee is passed on to ratepayers in the form of higher electricity bills.
8. Current requirements mandate penalty payments for not meeting minimum renewable generating capacity levels. Penalties are currently 6 cents per Kw/Hr, escalating with inflation. Maine’s CMP & Bangor Hydro are presented with the incentive to sign with Maine wind generators to expensive long term contracts, or risk paying penalties with nothing to show for it. Maine ratepayers get the bill either way.
9. In the Pacific Northwest the Bonneville Power Authority overbuilt wind power for export to California, a state that mandated more renewable consumption. This critical mass of wind power is so difficult for the grid’s ISO to manage, it necessitated initiation of a surcharge on wind power which will be passed on to ratepayers. Maine’s buildup for Southern New England users could result in the same outcome.
10. Since Maine’s statutory wind generation goal will be intermittent and will largely produce off-peak and off-season, the ISO-NE will have to procure quick-start generation to back-up wind and to balance the grid. Not only does this require maintaining excess capacity in traditional generating plants like natural gas, it renders such traditional plants inefficient as they constantly start and stop, like city versus highway driving. Aside from increasing emissions, these combined capitol generation costs and inefficiency costs are shared among grid participants (socialized). They are not paid by the renewable generators, but by ratepayers.