GAO Report Finds Duplication in Wind Energy Initiatives

Mar 28, 2013

Washington D.C. – Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) today released a report by the non-partisan Government Accountability Office (GAO) highlighting duplication and waste in federal wind energy initiatives.

Chairman Smith: “The GAO identified significant duplication among the 82 different federal initiatives subsidizing wind energy. Despite this duplication, the administration wants to expand federal spending even further.  We should eliminate duplication, not throw more money at overlapping initiatives. We should also redirect efforts toward research that will help renewable energy companies compete without taxpayer subsidies.”

“The GAO’s findings are another reason why taxpayers should not continue to pick up the tab for billions of dollars in wind energy subsidies.”

The report, titled Wind Energy: Additional Actions Could Help Ensure Effective Use of Federal Financial Support, assessed fragmentation, overlap and duplication of wind-related initiatives across the federal agencies in fiscal year 2011 (FY11).

Key findings of the report:

  • Nine different federal agencies implemented 82 different wind-related initiatives in FY11. Together, the initiatives incurred about $4 billion of federal support—$2.9 billion in wind-related spending obligations and $1.1 billion in wind-related tax subsidies.
  • Almost half of the initiatives (39 of 82) have been launched since 2009, and most (68 of 82) overlapped with at least one other initiative.
  • GAO identified ten different initiatives that have provided or could provide duplicative support to deploy wind facilities. For example, a single wind project could receive federal support from a Section 1603 grant, accelerated depreciation, and a DOE loan guarantee, along with state support from tax incentives and indirect subsidies due to a state Renewable Portfolio Standard.
  • According to financial professionals, federal initiatives have provided cumulative support worth about half of the capital costs for many wind projects. 
  • GAO also found that “it is it is unclear if the incremental support some initiatives provided was always necessary to build projects. In the event that some wind projects receive more federal funding than is required to induce them to be built, this additional funding could potentially be used to induce additional projects to be built or simply withheld, thereby reducing federal expenditures.”  GAO recommended that agencies “formally assess and document whether the federal financial support of their initiatives is needed for applicants’ wind projects to be built.” 

GAO addressed the report to Chairman Smith along with Energy Subcommittee Chairman Cynthia Lummis (R-Wyo.) and Oversight Subcommittee Chairman Paul Broun (R-Ga.).  The full report can be found HERE