Cash Cow Offered by Lame Ducks

Commentary by Marita Noon - One of the important agenda items for the lame duck session of the 112th Congress is the extension of the Production Tax Credit (PTC) for wind energy. The PTC is set to expire December 31 and Congress estimates that extending it for one year will cost about $12 billion. I’ve written on it repeatedly.
Because of their fiscal conservative inclination, Republicans have repeatedly blocked the PTC extension.  Pre-election, Republicans held 47 Senate seats out of 100. Corralling all 47 Republicans and 4 Democrats and/or Independents to stand together in opposition to the extension was difficult—but not impossible. Post-November 6, there are now only 45 Republican members. Every out-of-party vote needed decreases the odds that the PTC will be allowed to expire—probably doubling the difficulty. The difference between 6 and 4 Senate Democrat votes doesn’t sound like a big difference to the casual observer, but it greatly shifts the odds in favor of the PTC extension in the Senate.
Additionally, according to the American Wind Energy Association (AWEA), on November 13, 23 governors signed a letter calling on Congress to extend the PTC. The letter has signatories such as Iowa’s Terry Branstad and Kansas’ Sam Brownback—both Republicans, and Oregon’s John Kitzhaber and Colorado’s John Hickenlooper—both Democrats.
Interestingly, the number of governors calling for the PTC extension closely parallels the number of states with a mandate for a specific percentage of renewable energy by a set date. The percentage mandated, frequently called a Renewable Portfolio Standard (RPS), varies state-to-state—with California’s being the most extreme.
Instead of calling on Congress to extend the PTC, governors should direct state lawmakers to repeal the RPS.  Instead of trying to repeal the RPS, well-funded environmental groups have been working to make renewable energy mandates part of a state’s constitution—where it can’t be repealed (or at least not easily). Michigan’s Proposition 3 is the case in point.
Marketed as the Michigan Energy Michigan Jobs Proposal, Prop 3 sought to amend the constitution to require Michigan utilities to derive at least 25 percent of their electricity from renewable sources by 2025. Not surprisingly, groups like the Sierra Club supported Prop 3 with millions of dollars in advertising. They saw the Michigan case as a test, believing that a win in Michigan would tell the world that the public wants renewable energy.
Going forward, we don’t need a gift horse and we don’t need to give well-connected cronies any more steak off the cash cow. We don’t need energy that is inefficient, ineffective, and uneconomical. We do need energy that is abundant, available, and affordable. We do need an energy policy that is based on sound science and free-market principles that will unleash an economic recovery.
If we do not take action now, we have no chance of getting the American economic recovery we need. Read full column

Cash Cow Offered by Lame Ducks