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Floating Windmill, Hidden Tax

Eric Luedtke is cheering Governor O’Malley’s support for a wind project off the coast of Delaware and the possibility of one off Ocean City:

The fact is that Maryland is starting to fall a little behind the curve on building alternative energy sources. States out west have been expanding capacity at an unbelieveable rate, and Texas is set to become the wind energy capital of the world as T. Boone Pickens and others see the potential for profit.

Meanwhile, despite our commitment to a renewable energy portfolio, Maryland has not seen any of the sort of large scale projects happening out west. Part of that is geography – the western United States is much more prime territory for wind, solar, and hydrothermal energy. But we need to see these large scale projects in order to reduce the state’s carbon footprint and put us on the path to preventing global warming, and the Atlantic seaboard has great potential as a site for one. So this is an excellent sign, a great first step, and the Governor deserves credit for taking a stand in support of it.

What Luedtke is really cheering for is higher energy costs and hidden regulatory taxes. While increased Renewable Portfolio Standards (RPS) appear to be a peachy green method of providing energy, what they really are, as my colleague Paul Chesser noted, are hidden regulatory taxes. When states increase their RPS standards as Maryland did from 9.5% to 20% by 2022 and Delaware to 20% by 2019, it forces utilities to charge their customers in order to offset the higher cost of purchasing renewable energy like solar and wind. The News Observer in North Carolina reports that Progress energy is attempting to get its proposed fees on residents and commercial customers approved by North Carolina’s version of the PSC. Here is the takeaway from the piece: “Progress plans to increase the charges as it increases its reliance on renewables.

Just as utilities suppliers pass on the costs of energy conservation programs to ratepayers, so will energy suppliers eventually pass on the higher costs of procuring renewables to ratepayers. It’s a fair bet Maryland utilities will, in the near future, apply for rate increases to offset the added cost of purchasing renewables to meet the increased RPS mandates.

Wind power is subject to the whims of mother nature. Wind patterns, whether offshore or on the mainland can be rather unpredictable. Luedtke hypes Texas as an exemplar. However, the loss of wind power in Texas back in February and the resulting loss of 1,100 megawatts in 10 minutes belies the lofty rhetoric about wind power.

Luedtke mentions T. Boone Pickens’ vision of potential profit from wind power. This is true, but Pickens is merely rent seeking. That is, his profits visions are based on getting from government what he cannot get on the open market. Pickens set a lofty goal of generating 20% of our electricity from wind power by 2030, based on a DOE plan written by the wind industry–natch.

How does Pickens propose to meet this goal? Government mandates and subsidies of course. Steve Milloy points out that according to the Department of Energy the cost of this 20/2030 plan is $43 billion more than the cost of non-wind assets. That number also excludes all the new transmission lines that would need to be built. Furthermore, a DOE official noted that the entire US wind system would need to be replicated every year beginning in 2018 to meet the goal. This idea has all the hallmarks of Soviet Five-Year Plan.

Not coincidentally, Pickens is building the largest wind farm in Texas (4,000 megawatts of capacity). He just placed an order for 67 turbines with king of the rent seekers General Electric, who just happens to be one of the largest manufacturers of wind turbines in the world, and proud sponsor of all things Al Gore.

You see Pickens is on a $60 million public relations campaign to get federal wind subsidies reauthorized. They expire at the end of the year. The subsidy is 1.9 cents per kWh. Do the subsidy math with his proposed 4,000-megawatt wind farm; Pickens is looking to rake in a lot of taxpayer scratch. All we will get out of it is higher energy costs and more claptrap about energy independence.

When you stop and think about it, we are getting screwed from both ends. We pay taxes for the privilege of having to pay higher energy costs.

The federal government taxes us to subsidize wind power, which is more expensive to produce and transmit than coal or natural gas-fired electricity. Then, in the form of rate increases and additional fees, we are charged more on our monthly bills because through increased RPS, states require utilities to purchase the more expensive wind power.

Yes, Eric lets give credit where credit is due. You and Governor O’Malley are advocating higher energy costs for all of us. Bravo!

Progressives like Luedtke are the first to beat the drum about evil corporations gaming the system, yet they become tone deaf when corporations do the same thing for progessive ends.

You gotta love the whole “path to preventing global warming” nonsense too. Well I guess that is to be expected. Progressives foolishly believe they can change human nature, its only natural (no pun intended) that they would move on to thinking they can change nature itself.






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