The Wind Tax Credit -- The Billings Gazette Two-Part Series

Second part: Link to The Billings Gazette.
First part: Link to The Billings Gazette.

This is the two-part article I referenced earlier about the inexpensive energy in the northwest. This is the first part of the article.

From the first part:

There's quite a bit to the article but this bit on wind is interesting:

Qualifying wind farms get a $22 tax credit for every megawatt hour of power they produce. If the market price of power falls below that amount, they still get the money.

In fact, during the past 12 months, wind-power producers at times have actually paid electricity buyers to take their power, because they could still get positive income on the deal through the tax credit, regional power officials say.

This phenomenon is known as “negative pricing,” when the market price for power has been less than zero during off-peak hours, usually the middle of the night. A wind farm might pay the wholesale buyer $5 per mwh to take the power the farm is producing at off-peak, but, with the tax credit, it still makes $17 per mwh. [Elsewhere, there is a story out of Idaho that requires utilities to buy wind power even when they don't need it, like in the middle of the night. The utilities pass these costs on to the consumers. But I digress.]

“There is no commodity in the world that can be sold for a negative price, unless you’re making money somewhere else,” said David Hoffman, manager of external affairs for PPL Montana. “They’re willing to get less than the full tax credit, if they get a portion of it.”

Coal-fired plants are being mothballed. The champagne is flowing in Hawaii. 

From the second part:

“They go build a wind farm, they’re there for three-to-six months,” said Bob Winger, a union boilermaker from Billings and vocal critic of wind-power subsidies. 

“Coal mines and coal-fired power plants are jobs day-in, day-out. … Who are all of these people (in wind) that they say are employed?” 

 According to figures compiled by the state and the wind power industry, wind projects in Montana have created about 1,300 construction jobs the past seven years — but only 86 permanent jobs. 

Montana coal mines, whose product is burned to produce power, employ about 1,100 people, and coal-fired power plants here employ at least another 400. The wind power production tax credit pays project owners $22 for every megawatt hour (mwh) of electricity they produce. 

In the Pacific Northwest right now, spot-market prices for electricity are averaging $25 per mwh. So, while sellers of other types of power get $25 per mwh, a wind-power plant will get $47 per mwh, with the subsidy. 

Great article.