Bypassing Congress for Green Energy Handouts

With less than one year left in the Obama administration, the president is directing federal agencies to rewrite the rules and enact his agenda.

When it comes to environmental policy, for example, he’s using the IRS and other agencies to move heaven and earth to extend corporate welfare to special interests in the wind energy industry.

As evidence, consider new efforts at the IRS to expand access to the wind industry’s main handout—the production tax credit (PTC). Without input from Congress, the agency extended the amount of time that wind energy companies have to claim the federal production tax credit from the year that they begin a new project—the so-called “commence construction” period—from two to four years in its most recent guidance.

Taxpayers would never get such leniency, but if you’re in the green energy business the IRS is far more willing to help you out.

This has been a pattern of behavior over the course of the Obama administration, particularly in President Obama’s second term. The IRS issued guidance in 2015 that changed the definition of eligibility from “placed in service” to “under construction.” Setting such a low requirement for eligibility make it easier for wind farm companies to qualify and sell their credits to others. This increases the absolute cost of the credit to taxpayers, and it ignores the fact that the $16.5 billion 5-year extension of the production tax credit was designed to “phase down” the credit, rather than expand it.

As if that weren’t enough, the IRS also glossed over the deadline established in statute—it clarified that wind energy projects would not lose the construction completion safe harbor simply because some of the turbines were not completed on time.

Unfortunately, it’s not just the IRS that’s taking part in these efforts to extend subsidies and bend the rules for special interests. Similar efforts are also underway at the Fish and Wildlife Service, which recently proposed to extend the period in which wind companies are permitted to injure or kill protected eagles, raising it from five years to 30 years.

The backstory here is that wind farms have a hugely negative impact on bird and bat populations. After years of consistently looking the other way, now it seems that the Obama administration is directing Fish and Wildlife Services to bend the rules. This change may lead to the deaths of thousands additional eagles each year, threatening the stability of these vulnerable and symbolic animals.

In other words, the Obama Administration is a friend of the environment, but if it has to choose between eagles and special deals for wind turbines, our feathered friends won’t have its back.

Directing federal agencies to expand handouts for the wind energy is a terrible deal for American taxpayers and ratepayers. These programs force Americans to pay twice for wind power—first on their tax bill, then on their energy bill.

Americans families and businesses deserve access to affordable and reliable energy solutions that can afford to compete on their merits in the marketplace. Instead, the administration is using our money to prop up politically favored energy sources that have seen woefully little return on their forced investment in decades.

President Obama has consistently worked around the people’s representatives in Congress to achieve his agenda. Directing federal agencies to do whatever necessary to preserve handouts and bend the rules for special interests is par for the course. Taxpayers and ratepayers deserve better, and it’s up to Congress to rein in these overreaching executive agencies.

Christine Harbin is director of federal affairs and strategic initiatives for Americans for Prosperity.

Morning Consult