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Mitt Romney Wants to Kill Wind-Power Tax Credits, Which Worries Texas' Wind Industry

The Brazos Wind Farm in West Texas probably wouldn't exist without the federal tax credit set to expire in December.
The Brazos Wind Farm in West Texas probably wouldn't exist without the federal tax credit set to expire in December.
Wikipedia

Mitt Romney did himself no favors in Iowa when a spokesman told the Des Moines Register the candidate would "allow the wind credit to expire, end the stimulus boondoggles and create a level playing field on which all sources of energy can compete on their merits."

In Iowa and much of the Midwest, the 2.2 cent-per-kilowatt-hour tax break for wind-power producers has helped establish a burgeoning wind industry, create jobs, and has opened a new source of income for farmers who install turbines on their land. It's politically popular and enjoys broad support from Democrats and Republicans alike. Romney's suggestion that it should end was roundly panned.

But what about Texas? Political sentiment here is no doubt much less unified on the wind credit issue, but we do have a thriving wind industry and produces more than twice as much power as any other state. What happens if the tax credit, which costs the federal government $1.6 billion per year, is allowed to expire in December?

David Carr, assistant director of the Alternative Energy Institute at West Texas A&M University, has been studying the industry since 1970. His short answer: Fewer wind projects will be built. A lot fewer.

If you look at a graph of wind development in Texas over time, you can get an idea, Carr says. There have been a couple of occasions that Congress has allowed the credit to expire before renewing it. During those times, the chart shows a sharp drop in new development. To be profitable without subsidy, a wind farm has to be in a location that has both a lot of wind and close proximity to transmission lines, which is rare. All told, Carr estimates that 70 percent of wind development in the state would not exist were in not for the federal subsidy.

So there would be a lot less wind power. But what of Romney's argument that the market should determine what forms of energy we use and produce? Carr didn't mention the obvious environmental benefits of wind, which one could argue justify some government help, but he dismissed the idea that the wind tax credits do anything but level the playing field.

"Most people in the wind industry don't want any special favors," he said. "It's just that there's built-in tax credits for coal and gas, even natural gas."

Already, new wind developments have stalled as the industry waits to see if the tax credits are extended, and things aren't looking particularly promising at the moment.

"Unfortunately, it's divided largely on partisan lines," Carr said. "And Romney saying (he's opposed) makes it worse."


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