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Feds duplicate wind energy efforts, fail to determine if money is needed

By Edward Felker, EnergyGuardian

Thursday - 3/28/2013, 5:49pm  ET

The government is duplicating some efforts to boost wind energy and sometimes fails to assess whether billions of dollars in grants and loans are really needed, the Government Accountability Office reported Thursday.

Republicans on the House Science, Space and Technology Committee, who requested the review of 2011 federal wind programs, said the results showed "duplication and waste" that should lead to an end to taxpayer support for wind energy.

"We should eliminate duplication, not throw more money at overlapping initiatives," Chairman Lamar Smith, R-Texas said . "We should also redirect efforts toward research that will help renewable energy companies compete without taxpayer subsidies," he added.

In the latest report to uncover duplicate spending across government, GAO said that it found 82 initiatives spread across nine agencies and departments, with most of the support managed by the Agriculture Department, Commerce Department, Energy Department, Interior Department and Treasury Department.

The programs in sum gave out about $2.9 billion in direct aid and about $1.1 billion in tax breaks.

Treasury accounted for nearly all of the direct aid:  more than $2.7 billion came from the  Payments in Lieu of Tax Credits program, also known as the Sec. 1603 program, and $1.1 billion in tax breaks through the Production Tax Credit.

Of all the programs, 68 overlapped with another program and seven programs at times backed the same project.

Federal wind energy programs "were fragmented across agencies, most had overlapping characteristics, and several that financed deployment of wind facilities provided some duplicative financial support," GAO said.

Wind developers at times combined Treasury tax support with grant or loan guarantee programs at the Energy and Agriculture departments.

While Treasury had little discretion in the projects it backed beyond determining eligibility criteria, GAO said the Energy and Agriculture departments failed to fully document whether projects really needed the help.

Energy made more than $147 million in total obligations that year, while USDA made  about $4.9 million.

The lack of documentation made it difficult to assess whether the federal support was always necessary, GAO said. "Federal support in excess of what is needed to induce projects to be built could instead be used to induce other projects to be built or simply withheld, thereby reducing federal expenditures," it concluded.

GAO recommended both departments formally assess financial need and document its reviews, which both agreed to do.