Greens worry grid study could threaten wind PTC

Source: Hannah Northey, E&E News reporter • Posted: Wednesday, May 10, 2017

Clean energy advocates are worried a fast-tracked Department of Energy study on subsidies and grid reliability could be used to attack critical tax incentives for wind and solar producers.

Lukas Ross, climate and energy campaigner at Friends of the Earth, said a study Energy Secretary Rick Perry ordered last month that was revealed through media reports could lay the policy groundwork for Republicans to undo the wind production tax credit (PTC) or other incentives in a larger tax reform package.

“Republicans badly want to cut taxes on corporations and the rich but have nothing resembling a serious plan to pay for it,” Ross said. “What makes this study so dangerous is that it could serve as a bad faith policy rationale for defunding renewable energy tax credits as part of a broader tax reform package.”

Perry ordered his chief of staff, Brian McCormack, on April 14 to initiate a study “to explore critical issues central to protecting the long-term reliability of the electric grid, using the full resources and relationships available to the Department.” Perry set a mid-June deadline for the study’s completion.

The study is being led by Travis Fisher, a political appointee who in his previous job at a conservative think tank wrote about the harm to the grid from state and federal policies supporting renewables.

Ross’ concerns aren’t without merit. Some conservative energy groups have said they also hope DOE’s review of baseload generation and subsidies will prompt reform of the wind PTC.

Even so, the head of the nation’s largest wind lobby during an interview last month said lawmakers appear to be standing behind the current phaseout of wind PTC.

Tom Kiernan, head of the American Wind Energy Association, said he has received assurances on Capitol Hill that the wind PTC will be allowed to phase out over five years. The credit is slated to fall to 80 percent of its current value, with additional 20-percentage-point drops in the next two years.

DOE, which didn’t respond to a request for comment, is also facing backlash from Democrats in the Senate and other environmental and renewables groups for the study’s approach.

Earlier this month, seven Senate Democrats warned Perry that the Institute for Energy Research, where Fisher previously worked, would be the first to benefit from such a study. Fisher was an economist at IER before joining DOE (Greenwire, May 1).

And in a letter sent yesterday to Perry and Fisher, Ross joined six environmental groups including the Center for Biological Diversity and Oil Change International in calling the study “dangerously biased” and threw out an alternative approach.

Instead of focusing on ways in which “tax and subsidy policies … are responsible for forcing the premature retirement of baseload power plants” as Perry had requested, the groups suggested DOE staff look at subsidies for fossil fuel generation.

“We ask that you instead examine how subsidies to the fossil fuel industry, which have been in place for over 100 years, have distorted the market in favor of polluting technologies, hindered the market uptake of cheaper less polluting energy sources, and wasted precious public resources,” they wrote.