April 7, 2008
Congressman Randy Kuhl
1505 Longworth House Office Building
Washington, D.C. 20515
Dear Mr. Kuhl,
At our meeting on April 4, 2008 you requested information on the Sen. John Ensign, R-Nev., and Maria Cantwell , D-Wash., one-year, $6 billion extension as an amendment to the housing legislation. Refer to the article: Senate May Add Extension of Renewable Energy Tax Credits to Housing Bill, for details:
Cohocton Wind Watch strongly opposes any extension of renewal tax credits for the industrial wind industry. Please read the following from Glenn R. Schleede, 18220 Turnberry Drive, Round Hill, VA 20141-2574. 540-338-9958; for a concise argument why wind subsidies is detrimental to a rational alternative energy policy.
EIGHT REASONS WHY RENEWABLE TAX CREDITS SHOULD NOT BE EXTENDED
1. The original purposes of tax credits for wind energy – i.e., to encourage technology development and commercialization, gain a foothold in energy markets, and be more competitive with older, established energy sources – have been more than satisfied:
• Wind turbines, blades and towers are now produced by multiple commercial suppliers.
• Thousands of turbines have been installed and more have been ordered.
• The prices of traditional energy sources for electric generation – natural gas, coal, oil, uranium -- have increased dramatically since tax credits were first adopted.
2. Other existing federal tax breaks are huge. For example, most “wind farm” equipment is eligible for 5-year 200% declining balance depreciation for tax purposes – which already permitted recovery of 52% of the capital investment in the first 2 tax years and nearly 3/4th in the first 3 tax years.
The recently enacted 50% 1st year “bonus” depreciation allowance further accelerates the recovery of capital costs for “wind farms”; i.e., 60% in the 1st tax year and an additional 16% in the 2nd tax year.
In either case, a “wind farm” owner has all his equity back in 18 months or less!
3. Numerous other federal and state tax breaks and subsidies are now available for renewable energy.
4. Tax breaks – not environmental or energy benefits -- have become THE principal reason for building “wind farms.”
5. Excessive tax breaks and subsidies for wind energy are:
• Transferring millions of dollars annually from the pockets of ordinary taxpayers and electric customers to a few large corporations (many foreign owned) that own “wind farms.”
• Misdirecting billions in capital investment dollars to energy projects (“wind farms”) that produce very little electricity. The electricity is intermittent, volatile, unreliable, and most likely to be produce at night and in winter – not on hot late afternoons in July and August when electricity is needed. Because the output from wind turbines is unreliable, they cannot be counted on at the time of peak demand. They are not a substitute for adding reliable generating capacity to meet growing electricity demand or replace old generating units.
6. Claims of job growth and other economic benefits from investments in renewable energy have been grossly overstated. Results being reported are being driven by unrealistic assumptions, not facts.
7. Claims of environmental benefits have been grossly overstated and adverse environmental, ecological, economic, scenic and property value impacts have been ignored by the wind industry.
8. Tax breaks and subsidies for renewables further exacerbate the federal deficit situation.
As you see from this analysis, the false claims of the wind industry have suspect economic of energy generation merit. Add alleged Anti-trust violations that are currently under investigation and it would be imprudent for the Congress or the Senate to include industrial wind in any future federal subsidies.
A constituent of your, Brad Jones, offers this assessment:
“It is kind of amazing that the wind developers have actually admitted to price fixing, but they have.
An article in the Hornell Evening Tribune dated 4-3-08 has a quote from Eric Miller of Invenergy that the "going rate in the state is $8,000 per megawatt for Payment In Lieu Of Taxes agreements."
Since wind projects vary greatly in profitability due to factors such as wind resource, density of turbine sites, and proximity to high voltage transmission lines a competitive market would drive a range of PILOT agreements based on ability to pay.
But because of absolute market allocation there is no negotiation possible and local jurisdictions have to settle for the 8k per MW, or take nothing.
If taxed at normal real estate rates the payments to local governments would be about 10X the "going rate".”
It is crucial that the federal government not include deceitful schemes to defraud the tax payers in any future legislation. This is not a local issue like so many New York State representatives want to believe to absolve themselves of the their duty to protect the public. New York State elected officials on all levels have a responsibility to demand that any developer must prove that their enterprise has economic substance before any government subsidy is granted.
Western New York and many townships in your district are being extorted by companies that have refined the Enron model for energy fraud. No empirical proof or data evidence has been submitted to verify that our region has sufficient and consistent wind patterns to justice the consideration of industrial wind projects. Without such validation, it would be outrageous for Congress to include industrial wind in any alternative energy subsidy.
Also enclosed is a copy of a June 28, 2006 letter to Senator Hillary Clinton.
At this time we now formally request that your office intercede with the U.S. Attorney General and demand a formal investigation into the business practices of the wind industry. Cohocton Wind Watch has detailed documents and reports that can substantiate that illegal conduct is systemic.
CWW is part of the CITIZEN POWER ALLIANCE which is a coalition of independent groups organized to promote sound energy and environmental policy. CPA holds public officials and regulators accountable, while seeking the protection of the public interest.
Our member groups constitute concern citizens from every part of New York State and beyond. Several CPA groups reside within your district. It is important that a credible and comprehensive investigation be conducted before any future review of federal funds would be provided to industrial wind projects.
Current wind turbine technology is flawed and new technology is being developed that could offer a viable alternative. Compare these designs verses the failed wind technology now being used, which totally ignores the extensive adverse European experience that cause health and public safety risks and damages.
Congressman Kuhl, your constituents deserve federal intervention and enforceable regulation to hold the wind industry accountable for their culture of corruption. Local, state and federal officials and agencies have acted as willful accomplices. The United States faces a far greater energy scam than Enron. When this bubble blows, there will be no electricity generated, but every taxpayer will bear the financial burden of de-commissioning and fiduciary malfeasance.
Appreciate your prompt reply with a thorough plan for your involvement to resolve this urgent issue.
Cordially,
James Hall for CWW
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