The biggest wind energy purchaser in the country may sever ties with the industry’s largest trade group in the wake of a bitter fight to sustain subsidies for wind energy producers that, the company says, benefit producers at the expense of utilities and electricity consumers.
Xcel Energy, which had the largest wind energy capacity of any utility in the country in 2011, said it is “ reviewing our relationship” with the American Wind Energy Association, in the words of John O’Donnell, a company lobbyist.
“It’s our concern that they continue to represent the interests of developers to the exclusion of customers,” O’Donnell said.
AWEA was the driving force behind the reauthorization of the wind production tax credit (PTC), which was included in the recently-passed congressional deal to avert the fiscal cliff. The PTC extension was one of numerous special interest subsidies included in the legislation.
“Congress prolonged some of the worst energy policy” by including subsidies for the industry in the fiscal cliff deal, Heritage’s Nick Loris wrote on Thursday, noting that the PTC “distort[s] prices by disguising the costs of certain energy choices while exacerbating the costs of others.”
While the PTC benefits wind producers, it is expected to raise electricity rates for consumers and utilities that buy power from those producers.
“As the largest provider of wind to customers by far, we feel this action doesn’t do nearly enough for customers, and throws into immediate question any further plans we have to buy more wind on their behalf,” O’Donnell said.
Xcel was not entirely opposed to the PTC effort during the fight for its reauthorization. But its support was contingent on measures that would reward utilities for selling more electricity derived from renewable sources, a measure that was not included in the final legislation.
How much more are consumers and utilities expected to pay for wind energy under the PTC regime? The Institute for Energy Research estimates, “ratepayers are paying an extra $8.5 billion to $10 billion per year for using wind energy.”
According to an IER study released on Friday, those costs “will only grow as more capacity is added. Add to this the more than $12 billion that the American taxpayer is paying for the ‘one-year’ extension for the PTC, and one can see that the wind industry is getting a real boondoggle at the expense of taxpayers and ratepayers.”
Xcel would be the second company to cut ties with the AWEA due to its stance on the wind PTC. Energy company Exelon, one of the nation’s largest wind operators, was booted from the organization in September due to its vocal opposition to the measure.
The PTC, Exelon explained at the time, has “reached the tipping point where it’s distorting competitive markets that we operate in, … and it’s displacing other clean generation in the market.”
Lachlan Markay works to advance The Heritage Foundation . http://www.heritage.org/ policy solutions by breaking hard-hitting investigative news stories as a reporter for the think tank’s Center for Media and Public Policy.