Wind PTC Opponent Fiscal Hawk to Head Office of Management and Budget

Since arriving in Congress as part of the Republican Tea Party wave elected in 2010, Mick Mulvaney has been one of the most pugilistic advocates for cutting government spending.

“We are going to do great things for the American people with Mick Mulvaney,” Trump said Saturday in an e-mailed statement. “Right now we are nearly $20 trillion in debt, but Mick is a very high-energy leader with deep convictions for how to responsibly manage our nation’s finances and save our country from drowning in red ink.”

https://www.bloomberg.com/politics/articles/2016-12-17/trump-taps-f...

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Washington, August 13, 2014 

54 Members of Congress Write House Leadership In Support of Concluding Crony System (Including Mick Mulvaney)

WASHINGTON—In an effort to keep electricity costs low for millions of American families, Congressman Mike Pompeo, R-Kansas, and 53 other members of the House wrote a letter to House Leadership calling for an end to the Wind Production Tax Credit. The letter, which appears below, is the most recent effort by Republican members in the fight to end crony subsidies for energy corporations.

Top Points:

· Proponents of the wind PTC continue to call for an extension despite growing evidence that this subsidy has not only cost taxpayers billions, but has caused significant price distortions in wholesale electricity markets.

· According to recent articles and reports, these very same market distortions that are driving wind energy expansion have also led to higher electricity costs for American families.

· By ending this program now we will have given the wind industry a more than generous phase-out for a credit that is being awarded to a mature technology with over 61,100 megawatts of generation installed across the country and 13,400 megawatts under development in 21 states.

· Growth in wind energy is not driven by market demand, but instead by a combination of state mandates and a federal tax credit that is now more valuable than the actual market price of the electricity these plants generate.

· Ensuring that our nation’s patchwork tax code undergoes significant reform is a noble goal and, as part of this process, we believe Congress should stop picking winners and losers and finally end the wind PTC.

The letter’s text is below.

The Honorable John Boehner                                                                   The Honorable Kevin McCarthy 

Speaker of the House                                                                                House Majority Leader-Elect

H-232 The Capitol                                                                                    H-239 The Capitol

Washington, DC 20515                                                                            Washington, DC 20515

Dear Speaker Boehner and Majority Leader-Elect McCarthy:

We offer our full support of the current process undertaken by the House Committee on Ways and Means that will allow the most anti-competitive and economically harmful tax provisions, specifically the wind energy production tax credit (PTC), to expire.

Extending the wind PTC is a key priority for the Obama Administration and its efforts to prop up wind and other favored “green energy” technologies.  Under President Obama, federal subsidies for wind have grown from $476 million per year when he first took office to $4.98 billion per year today.  According to the Joint Committee on Taxation, a one-year extension of the wind PTC would cost American taxpayers over $13.35 billion.  Proponents of the wind PTC continue to call for an extension despite growing evidence that this subsidy has not only cost taxpayers billions, but has caused significant price distortions in wholesale electricity markets.

The U.S. Department of the Treasury (Treasury) has expanded the value of the Wind PTC over the years so that today it is worth 2.3 cents per kilowatt hour produced.  The Senate-passed tax extenders package included an extension of the PTC which was inserted into the American Taxpayer Relief Act of 2012. Treasury has interpreted the Senate modification expansively and issued guidance that if a wind project developer merely places a 5% deposit on a project initiated in 2013, it will have at least until 2015 and possibly 2016 to place the project in service and obtain the PTC.  This means that a wind project that “begins construction” in 2013 could receive subsidies until 2026.

By ending this program now we will have given the wind industry a more than generous phase-out for a credit that is being awarded to a mature technology with over 61,100 megawatts of generation installed across the country and 13,400 megawatts under development in 21 states.  According to the U.S. Department of Energy, over 43% of all electric generation nameplate capacity additions in 2012 were from wind, overtaking natural-gas fired generation as the leading source of new power generation.  This increase in wind development is occurring despite flat demand for power leading to a strain on the electric grid and threatening reliability due to the dramatic increase in an intermittent power resource as a share of the market.

Growth in wind energy is not driven by market demand, but instead by a combination of state mandates and a federal tax credit that is now more valuable than the actual market price of the electricity these plants generate. According to recent articles and reports, these very same market distortions that are driving wind energy expansion have also led to higher electricity costs for American families. In a May 4^th Wall Street Journal article Warren Buffett went as far as to state that “on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit.”

Ensuring that our nation’s patchwork tax code undergoes significant reform is a noble goal and, as part of this process, we believe Congress should stop picking winners and losers and finally end the wind PTC.  We applaud Chairman Camp’s leadership on this important issue and urge you to stand firm with him in opposition to extending this provision and allow the wind energy to compete on its own.

Sincerely,

Mike Pompeo

MEMBER OF CONGRESS

List of Signers (54): Scalise, Jordan, Blackburn, Hanna, Harper, Jones (NC), Whitfield, McKinley, Simpson, Harris, Perry, McClintock, Fleming, Lummis, Wilson, Olson, DeSantis, Ribble, Nugent, Bridenstine, Hultgren, Cramer, Bentivolio, Broun, Guthrie, Kinzinger, Aderholt, Nunnelee, Fincher, Smith, Lamborn, Mulvaney, Weber, Brooks, Gohmert, Hudson, Carter, Franks, Griffith, Lance, Fincher, Schweikert, Shimkus, Barton, Flores, Roe, Westmoreland, Coble, Capito, Barr, Labrador, Holding, Royce

 http://pompeo.house.gov/news/documentsingle.aspx?DocumentID=390758