[Congressional Record Volume 165, Number 185 (Tuesday, November 19, 2019)]
[Senate]
[Pages S6638-S6640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                       Wind Production Tax Credit

  Mr. ALEXANDER. Mr. President, I have come to the floor to talk about 
the wind production tax credit. This is a subject that I've talked 
about before. The Senator from Pennsylvania, Mr. Toomey, will, I 
believe, come soon to talk on the same subject.
  The wind production tax credit is so generous with taxpayers' money 
that wind developers can actually give away their electricity for free 
and still make a profit. Let me say that again. I am talking today 
about the wind production tax credit, which is a tax subsidy--taxpayer 
dollars--given to wind developers, and it is so generous that the 
developers can actually, in some cases, give away their electricity for 
free and still make a profit.
  That wind production tax credit has been extended 11 times. It has 
been on the books for more than 25 years. This was a tax credit that 
was supposed to jump-start a new industry--that's 25 years of jump-
starting. Four years ago, Congress agreed to end it. We thought that 
was it. In doing so, Congress asked taxpayers to provide another $24 
billion, according to the Joint Committee on Taxation, to extend the 
wind production tax credit--$24 billion more in subsidies for another 5 
years and gradually phase out the credit. That is what we thought we 
did 4 years ago. We would spend $24 billion more in exchange for 
phasing out and ending the wind production tax credit. This is on top 
of the nearly $10 billion taxpayers paid between 2008 and 2015 and the 
billions more the taxpayers have paid since the wind production tax 
credit was created in 1992. That was supposed to be the end of the wind 
production tax credit 4 years ago. Remember, it

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was supposed to jump-start a new industry. President Obama's Energy 
Secretary said years ago that wind is already a mature industry. That 
was during the Obama administration.
  Now some Members of Congress are trying to break the agreement of 4 
years ago to end the wind production tax credit. Earlier this summer, 
the House Ways and Means Committee reported legislation that extends 
that credit through the end of 2020. This huge amount of money is not 
the only thing wrong with that proposal.
  First, the wind production tax credit undercuts reliable electricity 
like nuclear power. This is called negative pricing, which is when wind 
developers have such a big subsidy that they can give away their 
electricity and still make money. If you are a wind developer, for 
every kilowatt hour of electricity one of these 40-story-high wind 
structures produces, the taxpayers will pay you up to 2.3 cents, which 
in some markets is more than the cost of the wholesale value of each 
kilowatt hour of electricity. Negative pricing such as this distorts 
the marketplace. It puts at risk more reliable forms of energy such as 
nuclear power, which produces 60 percent of all the carbon-free 
electricity in the United States. In contrast, wind produces about 19 
percent of all the carbon-free electricity in the United States. I 
think it is important to produce carbon-free electricity. I believe 
climate change is a problem and that humans are a cause of the problem.
  Why would we undercut the production of nuclear power--which is 60 
percent of our carbon-free electricity--by the negative pricing of this 
big, expensive wind production tax credit? With nuclear power 
available, expecting a country the size of the United States to operate 
on windmills is the energy equivalent of going to war in sail boats.
  Second, in my view, windmills destroy the environment rather than 
save it. You could run these 40-story structures from Georgia to Maine 
to produce electricity, scarring the entire eastern landscape or you 
could produce the same amount of electricity with eight nuclear power 
plants. If you did run these giant structures from Georgia to Maine, 
you would still need natural gas or nuclear power to produce 
electricity when the wind is not blowing, which is most of the time.
  There is a much better way to spend the dollars that are available 
for clean energy. Instead of subsidizing wind developers, the United 
States could use that money to double the nearly $6.6 billion that the 
Federal Government spends on basic energy research to make truly bold 
breakthroughs that will help us provide cleaner, cheaper energy and 
raise family incomes.
  Earlier this year, I came to the Senate floor and called for a New 
Manhattan Project for Clean Energy, a 5-year project with 10 grand 
challenges that will use American research and technology to put our 
country and the world firmly on a path toward cleaner, cheaper energy. 
Specifically, I encouraged funding breakthroughs in advanced nuclear 
reactors, natural gas, carbon capture, better batteries, greener 
buildings, electric vehicles, cheaper solar, fusion, advanced 
computing, and doubling energy research funding. All of that is a 
better use of funding than more funding for wind developers, which is 
so generous that in some cases they can give away their electricity and 
still make a profit. Let wind energy go where we said it should go in 
2015; let it go unsubsidized into the free market. That is where we 
thought we sent it 4 years ago, and that is where it should go.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. TOOMEY. Mr. President, I want to join my colleague from Tennessee 
in explaining why we ought to allow this deal to stand--the deal that 
was struck some years ago to phase out these incredibly inefficient 
subsidies.
  I thank my colleague from Tennessee for his leadership on this issue. 
As you know, this is a very large tax subsidy. The government is 
already set to spend about $67 billion in energy tax subsidies just 
over the next 5 years, and we should be very clear about this: These 
subsidies lead to a lower standard of living. When we choose to take an 
inefficient form of energy and throw a lot of money at it, it just 
lowers the standard of living. We have less resources available for all 
the other things we could be doing with that money.
  As my colleague from Tennessee mentioned, the wind production tax 
credit began in 1992 for the very straightforward, simple reason that 
it couldn't compete. It is completely economically uncompetitive. The 
idea is, we will have this temporary subsidy to enable the wind 
production to reach an economy of scale, reach a maturity in the 
industry that would allow it to compete, and the consensus at the time 
was that ought to be achieved by about 1999. After about 7 years of 
taxpayer subsidies, the industry should be on its feet, should be 
competitive, and there would be technological improvements and 
everything would be fine. That was 20 years ago. We have been 
subsidizing it ever since.
  We extended this program 11 times. The wind component of all of our 
energy subsidies is about $25 billion over a 5-year period, and they 
still can't compete. The reason it can't compete is because it is just 
extremely expensive to build the electricity-generating capacity if it 
is a windmill. It is much more expensive than alternative forms of 
energy. The cost of building wind capacity versus natural gas, for 
instance, is pretty stark. It costs less than $1,000 per kilowatt of 
capacity for a natural gas-fired powerplant. It costs over $1,600 per 
kilowatt for wind production.
  Obviously, after the production is done, windmills don't require 
ongoing fuel. Amazingly enough, that savings is not enough to ever 
recoup the huge amount of capital you have to lay out upfront to build 
this very, very expensive technology. You don't have to take my word 
for it. Warren Buffett had something to say about this. He knows 
something about investments. He knows something about economic 
efficiency. Warren Buffett said:

       We get a tax credit if we build a lot of wind farms. That 
     is the only reason to build them. They don't make sense 
     without the tax credit.

  That is the reality we have. It is compounded by the fact, of course, 
that wind energy is inherently unreliable. This will come as no 
surprise to my colleagues. You don't generate electricity from a 
windmill unless the wind is blowing. Unfortunately, it is just a fact 
of nature that wind generation tends to peak in the middle of the night 
and early morning hours when our energy needs are at their lowest.
  It is very hard to store electricity, so we end up with this bizarre 
situation that the Senator from Tennessee alluded to, where sometimes 
the wind farms are generating tremendous amounts of electricity, when 
no one needs electricity, because there is a wind storm in the middle 
of the night, but because they are so heavily subsidized by taxpayers, 
the wind farm companies are willing to pay the electric grid operator 
to take their electricity. Normally, you sell your electricity. They 
actually will pay money to have the electrical grid take their 
electricity. This is extremely disruptive for the conventional sources 
of electricity, whether it is nuclear or gas or coal, because they have 
to be there all the time to adjust for the wild fluctuations that come 
from wind-generated electricity. It is very hard for them to have a 
vehicle business model when occasionally the product they produce has a 
negative value. It is just bizarre.
  I want to stress another element of this, which is the original 
rationale. The original rationale was that this was a new industry. It 
was going to need some help getting on its feet and getting 
established, and after some period of time, it would be able to compete 
on its own. This is no longer even remotely the case. In fact, there is 
a tremendous amount of wind-generated electricity in America because 
these subsidies have been so big for so long.
  In 1999, we had only 4\1/2\ billion kilowatt hours of electricity 
generated from wind. In 2018, we had 275 billion kilowatt hours--a 
6,000-percent increase in two decades. It is now 7 percent of all U.S. 
electricity generation because these subsidies are so expensive.
  I think it was, in part, because of the enormous growth of this 
industry and the maturity of it--the decades-long history--that 
Congress finally decided back in 2015 that we would phase out these 
subsidies. We wouldn't do it immediately, but we would phase them

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out by 2019. So 20 years after the subsidies were supposed to end, we 
are now on a glide path to phasing this out and having these taxpayer 
subsidies expire at the end of this year.
  At the time the Wind Energy Association looked at this in 2015, they 
said: ``Growth in the wind industry is expected to remain strong when 
the PTC is fully phased out.'' PTC is the production tax credit. That 
is what we are talking about. Lo and behold, we get to the end of 2019, 
or nearly so, and, sure enough, some folks in Congress are saying: 
Well, let's not stick to that deal. Let's continue this subsidy even 
longer. So we had a markup in the Ways and Means Committee of the other 
Chamber to add yet another year's extension to the wind tax credit that 
will cost another $2 billion.

  I just don't think we should break the deal that we had in 2015. This 
is an inefficient use of taxpayers' money. This makes our economy less 
efficient. This lowers our standard of living and is disruptive to the 
ongoing base sources of electricity that we need across the country.
  The last point I want to make is that it is not as though we have an 
energy shortage in this country. It is not as though we are going to 
have to turn to hostile foreign sources to get the energy to replace if 
we don't continue heavily subsidizing wind production. The fact is we 
have staggering amounts of natural gas--enough natural gas to serve our 
electricity generation needs for the indefinite future. In 2017, the 
United States became a net exporter of natural gas. It is a huge, 
growing source of electricity generation that is clean, that is 
reliable, and that is incredibly abundant. We came to the right 
conclusion some years ago. Now is our opportunity to stick to it.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Cruz). The Senator from Texas.