STUDY: Majority of States Losing Millions to Big Wind

Written by IER

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WASHINGTON — In a study released today assessing the distributional impacts of federal wind subsidies, analysts from the Institute for Energy Research found that 30 states and the District of Columbia are marking up net losses to fund the wind Production Tax Credit (PTC) and pour millions of their taxpayer dollars into the pockets of wind producers. In fact, producers in the top ten "taking" states received more than 72 percent of the total PTC subsidy transfers in 2012, while entire regions of the country receive zero subsidies but are forced to pay an unfair share of the tax burden related to federal wind subsidies.

According to IER researchers, five U.S. states were net payers of more than $100 million in 2012, meaning that the burden of these states to pay for the wind Production Tax Credit surpassed the subsidy benefit received by producers in those states. Meanwhile, producers in states like Texas, Oklahoma, and Iowa are being paid hundreds of millions of dollars in subsidy transfers from poorer states. On a regional basis, the Northeast and Southeast were the biggest net payers, subsidizing other areas with net losses of $591.8 million and $559.3 million, respectively.

"Federal wind subsidies impact every state and region in the country," the report states, "and subsidies such as the wind PTC are inefficient policies that distort energy markets, threaten grid reliability, and encourage rent-seeking rather than energy production."

"A majority of U.S. states — generally states that lack the geography and wind supply to support wind power — unfairly shoulder the burden of these subsidies . . . This report shows that federal wind subsidies are terribly inequitable."

Highlights from the study:

To read the full study, click here.

To register to attend IER's Wind Welfare Policy Summit hosted on Capitol Hill this Tuesday, click here.

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today's global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

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