More research needed to determine whether overlapping subsidies actually waste money — GAO

Source: Nick Juliano, E&E reporter • Posted: Wednesday, April 17, 2013

A recent report on duplicative federal programs supporting the wind industry did not reach any conclusion on which, if any, of those programs wasted the government’s money — and more research is needed to answer that question for wind along with numerous other federal programs that support different energy sectors, the author of the report told a House hearing yesterday.

The Government Accountability Office last month studied a variety of incentives available to the wind industry and found that some programs overlap, allowing companies to “double dip” and benefit from several programs at once. But the report did not conclude that such overlap was necessarily wasteful (Greenwire, March 28).

More study is needed to determine whether benefits flow to companies that do not truly need them to get projects off the ground, thereby wasting federal dollars, GAO’s natural resource and environment director, Frank Rusco, said yesterday at a joint hearing of the Science, Space and Technology Committee’s oversight and environment subpanels.

“We’re very careful to say we don’t know … whether that duplication is necessary for the project to go forward,” he said.

Rusco also suggested further study of state-level benefits, such as renewable portfolio standards, in response to questions from panel Republicans. Pressed by committee Democrats, he also acknowledged a need to search for waste and duplication in the suite of often-overlapping benefits that can benefit coal, nuclear, oil, natural gas and other sectors.

Republicans complained during the hearing that too many wind subsidies support the deployment of existing technologies — with tax credits or loan guarantees — rather than funding more research and development into new technologies that could reduce the cost of wind energy.

American Wind Energy Association interim CEO Rob Gramlich, who testified at the hearing, said government support for his industry provides a good return to the taxpayer because the assistance allows for billions of additional dollars in private investment and creation of domestic jobs.

Robert Michaels, an economics professor at California State University, Fullerton, and senior fellow with the conservative think tank Institute for Energy Research, delivered the anti-wind case at the hearing. He argued that wind generation cannot compete with traditional sources because it is available only when the wind is blowing, usually at night when power demand is low.

Also invited to testify was Audra Parker of the Alliance to Protect Nantucket Sound, a group that has spent a decade fighting the proposed Cape Wind offshore project in Massachusetts. The invitation signaled continued GOP opposition to the project, an effort that also includes attempts to block the Department of