Floor Remarks of U.S. Senator Lamar Alexander (R-TN) on “Tax Credits for Renewable Sources of Electricity”
April 10th, 2008 – Mr. President, I rise in favor of the Alexander-Kyl amendment No. 4429, which we hope is a helpful amendment to the Ensign-Cantwell amendment. Let me try to say this in two different ways. If you care about climate change, here is what our amendment will do. It will extend from 1 year to 2 the production tax credit for all qualified renewable sources of electricity. In other words, these emerging renewable energies, which have the capacity to work 24 hours a day, would have 2 years, as well as wind.
Second, it would mean that wind would not get all the money but that some others would have more time to respond to the incentives we are creating with these tax credits. Let me use a story to illustrate. Let’s say a family has several children. One of them older. Dad calls a meeting and says: I have $3 billion extra, which is the amount of money we are talking about for the Ensign-Cantwell amendment. Let’s give it to the overgrown son who is still living at home who has gotten most of the allowance money for the last 16 years. Let’s give him another year. Mom, who is a little wiser, says: It is nice for you to want to give an allowance to the children, but what about all these other children — open-loop biomass and small irrigation power and landfill gas and trash combustion. Instead of giving all the money to the son living at home, let’s give some to all the children, including the overgrown son. That is what we would do if we adopt the Alexander-Kyl amendment.
According to the Energy Information Administration, the production tax credit Senator Ensign wants to extend for a year, 97 percent of it went to wind in Fiscal Year 2007, which has gotten most of our renewable electricity tax credit money since 1992. So the Ensign-Cantwell amendment is being advertised as helping renewable energy. It adds another $3 billion over the next 10 years to the $11 billion we have already invested in wind and these other promising children. Wind only works when it wants to. These emerging technologies might work when they are told to. We would like to include them. Wind would still get more of the money than anybody else, but it would not get 97 percent. It would not get almost all of it.
There is another reason to favor the Alexander-Kyl amendment. That would be if you care about the spending of tax dollars. According to the Energy Information Administration, we spend 53 more times per megawatt hour on wind than we do on coal in subsidies, and coal provides half our electricity. We spend 94 more times on wind per hour than we do on natural gas which produces clean electricity; 15 times more on wind per megawatt hour than we do on nuclear; 26 more per megawatt hour than we do on biomass; 25 times more than we do on geothermal; 35 times more than we do on hydroelectric; 17 times more than we do on landfill gas. We spend 27 times more per megawatt hour to subsidize wind, a proven technology that only works when it wants to, than we do on all the other renewables, 27 to 1. That is not a wise use of tax dollars.
We urge support for the Alexander-Kyl amendment so these technologies, and wind as well, will have a 2-year extension of the tax credit instead of 1 and so all these promising children can help with climate change and clean air rather than giving all the money to one overgrown son who ought to be out on his own by now.
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Mr. President, let me emphasize this point. No. 1, the Alexander-Kyl amendment has more certainty. It extends the production tax credit from 1 year to 2 for all these. Second, the distinguished Senator from Washington mentioned solar power. Solar asked to be out of the production tax credit 3 years ago because all the money in the production tax credit was going to wind. In the Energy Policy Act of 2005, I was the lead sponsor of the amendment adding the investment tax credit for solar power. No one loses under the Alexander amendment No. 4429, except wind is treated similar to everybody else. It gets 1 cent per kilowatt hour. That means it will still get more of the money than anybody in the production tax credit. But open-loop biomass, all these emerging renewable technologies will suddenly have a fighting chance to get some of the money that since 1992 has almost all gone to one proven technology. That is not a wise use of taxpayer dollars. It is not a good use of funds to continue to over subsidize wind, which is now a mature energy technology. Two years instead of one is a vote yes.
