MISCALCULATED SUBSIDIES

EIA studies on energy incentives distort value of spending on wind energy
July 26, 2011 (American Wind Energy Association)

"The 2011 report on energy incentives from the Energy Information Administration (EIA), requested by Representatives Jason Chaffetz (R-UT), Marsha Blackburn (R-TN), and Roscoe G. Bartlett (R-MD)…[is expected to use the flawed methodology of] analyzing only a single year of energy incentives…[This] is a poor way to judge the support afforded by the U.S. government to many kinds of energy sources for decades."

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"Consider a coal-fired power plant installed in 1965 and still generating electricity today. That power plant was subsidized when it was installed, and the mining and transportation of its fuel have been subsidized in the 45-plus years ever since then. If you look at the plant’s incentives in 2010, they are only a tiny slice of the total federal expenditure—the cost of the plant was amortized long ago."

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"Now consider a wind farm installed in 2008. The production tax credit it received in 2010 was part of the basis for financing its construction. Once that credit is used up (in 2017), it will receive no further incentives (because it uses no fuel). Comparing its incentives with those provided to a 45-year-old coal plant is comparing apples to oranges…Analyzing only a single year of energy incentives inevitably gives a misleading representation of the support afforded by the U.S. government to all kinds of energy sources…The steady and significant government support provided over the past 50 or more years has allowed generation from sources like nuclear, coal and even hydro to flourish and become major electricity sources…"