Wind Power Is a Sacred Cow Ripe for Slaughter, but a Tax Is the Wrong Way to Do It

There is a lot of very bad public policy surrounding wind power.

One example is the massive, market-distorting wind power production credit. An unfortunate amount of wind power’s market share is built on this subsidy.

Another example is the preference the wind industry gets when selling their power to the grid. Currently politically popular power sources like solar and wind not only get to collect their government subsidies but also get to flood the power grid with their power (when they’re producing it) ahead of the energy from any other source.

This often forces base load generators like coal and nuclear to sell their power at a loss, only hoping to recoup their money by selling energy when the wind isn’t blowing.

These wrong-headed policies, born in the bubble of environmental politics, are destabilizing our power grid by granting preference and out sized market share to intermittent power sources. Base load power sources like coal or gas plants are treated as second class citizens on the power grid, yet still carry the responsibility for providing all the power Americans want whenever they want it.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]Streyle has the right idea. Wind power as a sacred cow needs slaughtering. He’s just picked up the wrong tool for the job.[/mks_pullquote]

So when I read that Rep. Roscoe Streyle has proposed a new tax on wind power, I understand his motivations. He called current subsidies for wind energy “absolutely ridiculous,” according to the Minot Daily News. “It does affect our coal industry, which is producing less coal every year,” he continued.

If wind were beating coal on a level playing field that would be one thing. But unreliable, heavily subsidized wind energy undermining base load power sources is not just bad policy, it’s harmful in fundamental and demonstrable ways to the resilience of our power grid.

That being said, I’m not sure Streyle’s idea for a punitive tax on wind power is the right way to rectify these wrongs.

The bill his HB1372 and would “assess a tax on wind plants of $1.50 per megawatt-hour of electricity generated and a tax equal to 10 percent of the production tax credit granted to the wind facility,” the Minot Daily reports. “The bill directs most of the new revenue to the state’s general fund. Forty percent of the $1.50 per megawatt-hour would go back to the county or counties in which the wind farm is located.”

There is an existing tax of $2.50 per kilowatt times the rated capacity of the wind generator which goes to local taxing entities including the counties. Streyle’s tax would be on top of that existing tax.

But it wouldn’t really be the wind companies which would pay this tax. Dale Niezwaag, senior legislative representative for Basin Electric, said “It’s a tax that gets passed on to the end consumer.”

He’s right. That’s true in any industry. Taxes are a cost of doing business which businesses build into the prices they charge for their goods and services.

Streyle has the right idea. Wind power as a sacred cow needs slaughtering. He’s just picked up the wrong tool for the job.