Texas Comptroller’s New Report Should Not Play Favorites

lollie-pop flickrRecently, the Texas Comptroller, Susan Combs, decided to come out swinging against renewable energy, specifically wind, in a report entitled Texas Power Challenge: Getting the Most From Your Energy Dollars. It would be easier to take this report seriously if it applied the same pressure and scrutiny to the oil, gas, and coal industries, which have received subsidies and incentives hand over fist. But, no, the attacks seem to focus only on renewables.

What’s worse is the Comptroller’s report is not based in fact. One of the main points of contention is the CREZ transmission lines that were built to ease the bottle-necked energy congestion in West Texas. Yes, this congestion was partly due to more wind energy on the power grid needing to make its way to cities in the East, but natural gas very much benefited from the added transmission lines as well. Even Railroad Commissioner Barry Smitherman, a Republican ally of Combs', took her to task for this in a statement to the Texas Energy Report:

I think that [the report] does a disservice because it doesn’t talk about the advantages. It only talks about the cost. It conflates the federal tax credit for wind with the CREZ lines. It’s important for people to understand that the CREZ lines are just lines. They are long life assets. This latest report treats CREZ lines as if they are some alternative species of transmission. They’re not. They’re transmission lines. They are just like all the other transmission lines that we have built in ERCOT (Electric Reliability Council of Texas). They are paid for in the same way. To somehow suggest that these are different, that they’re just for wind, is really misleading."

Jeff Clark, executive director for the Texas Wind Coalition, also responded and highlighted the unfair playing field for clean energy resources – something EDF has written about in the past:

Government has traditionally supported early stage energy innovation. 'As a percentage of inflation-adjusted federal spending, nuclear subsidies accounted for more than 1% of the federal budget over their first 15 years, and oil and gas subsidies made up half a percent of the total budget, while renewables have constituted only about a tenth of a percent. That is to say, the federal commitment to oil and gas was five times greater than the federal commitment to renewables during the first 15 years of each subsidies’ life, and it was more than 10 times greater for nuclear.' Today, incentives for wind’s competitors have been in place for hundreds of years (coal) and for nearly a century in the case of oil and gas. Just a few years ago, [the Comptrollers] own report (The Energy Report – 2008) estimated federal subsidies for various forms of energy and reported that wind received only 3.4% of 2006 federal support. In the same report, data is presented showing that the oil and gas industry in Texas received 99.6% of state and local incentives. To quote, 'The Comptroller’s Office also compiled an estimate of state and local energy subsidies for 2006. In Texas, state and local subsidies totaled $1.4 billion in 2006. Oil and gas garnered most of the subsidies with an estimated 99.6 percent.' In the absence of comprehensive tax reform, little has changed since that time and wind’s competitors continue to reap billions in subsidies every year."

Furthermore, as Clark points out, "this week’s report fails to mention, but it is important to note, that the federal Production Tax Credit (PTC) for wind is currently expired."

Not remaining silent, Charlie Hemmeline from the Texas Solar Power Association weighed in as well, noting the federal government, rather than the State of Texas, incentivizes solar in the form of the Investment Tax Credit (ITC), which "provides investors in solar projects with a tax credit of 30% of the value of their investment, thereby reducing taxes paid by the investor to the federal government and allowing those dollars to remain in Texas. No Texas tax dollars are spent on the ITC, and no solar incentive exists at any level that subsidizes electricity sold into the competitive market." Hemmeline further states that it is "unfortunate" that this report "does not provide an ‘apples to apples’ comparison of incentives across industries, comparing, for example, a single year of state incentives to natural gas with a 9-year total of nationwide incentives for wind. Using data from the Comptroller’s last ‘apples to apples’ comparison, the following table shows annual levels for federal, state, and local incentives related to electricity generation:”

comptroller

The Comptroller's report comes at the same time Texas Public Utility Commission Chairman Donna Nelson decided to unfairly peg wind and solar energy by opening up a case to review planning and system costs related to renewable resources. A docket related to that topic has garnered a number of comments, and a commission workshop is set for October 30. The overarching consensus – from fossil generators to renewable companies alike – is don’t open that can of worms! Nobody wants to start allocating transmission costs per specific resource. And if that was to happen, there is a chance the cumbersome fossil fuel plants that require more maintenance, fuel, and water may end up paying more to deliver electricity.

The overused claim government should not be picking winners and losers is tired and inaccurate. The U.S. has picked fossil fuels as the winner for the past 100 years (with subsidies and tax breaks that continue to this day). The arguments made against clean energy incentives always assume a neutrality of societal costs and externalities across energy players. But when one technology or a suite of technologies, like wind and solar energy, can provide for a better world, upholding a free-market dogma that has never really existed in the marketplace doesn't make good sense.

For the sake of argument, let's use this party line once more and ponder this: when the winners are the health of our planet and the people that live on it and the losers are climate change, pollution, and environmental devastation, I think it’s pretty clear which side to be on.

This post originally appeared on our Texas Clean Air Matters blog.

Photo source: Lollie-Pop Flickr

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