The bureaucrats in the Obama administration have decided that in order to expand wind power the taxes to pay for it must be expanded to areas that will in no way derive any benefit from wind power. That’s because it’s so expensive and unreliable that to tax only those who will directly benefit would probably cause a revolt. They must have hoped that nobody would notice if they spread the pain far and wide. Ah, but along comes the Interstate Power and Light Co. (IPL) which has filed a complaint on the behalf of half a million rate payers in Iowa and Minnesota who will have to pick up the tab for almost $200 million in power lines to connect wind farms to the power grid.
The utility provides compelling evidence that “the burden of these huge costs is unrelated to any benefits that may accrue to IPL and its customers.” And they are paying even though they “have not experienced any material improvements to reliability or lower energy prices.”
The case has ramifications nationwide because the price tag for upgrading and expanding power lines to reach offshore and remote wind turbines could reach $150 billion. The green energy lobby and Obama Administration want to socialize these costs on the backs of all rate payers.
We criticized this stealth consumer tax two years ago (“The Great Transmission Heist,” Review and Outlook, November 8, 2010). Michigan rate payers were asked to subsidize about 20% of the $16 billion cost to build wind-based power lines outside the state even though those customers received little benefit. These cost-shifting schemes would seem to violate the Federal Power Act, which says FERC should establish “just and reasonable” rates to cover transmission costs.
Yet in 2011 FERC issued new guidelines called “Order 1000” stating that pricing to cover transmission costs need only be “roughly commensurate” with benefits received—whatever that means. When we challenged FERC for straying from the user-pays principle, FERC chairman Jon Wellinghoff responded that his agency’s pricing proposal “makes clear that only those who benefit from transmission facilities will be allocated the costs of such transmission investments.”
Well, now we’ll see. (Read More)
Unfortunately, the complaint was filed with the FERC, so I’m sure they’ll rule against the rate payers.
When Obama talks about how we all have to have “skin in the game” he means it – our skin, his game. He just refuses to be honest about who is paying for all of his green schemes.