In a column Wednesday, the American Energy Alliance argued that wind energy should not be subsidized (“Expensive wind power tax credit should end”). The basic reasoning is that without government support, wind could not compete with coal and natural gas. The group’s underlying premise is that a free market in energy, with no government intervention, is in the best interest of Americans.
The first failure of this argument is that a free market requires that the prices reflect all of the costs. In the fossil fuel industries, health and environmental costs are not accounted for in the price of electricity. Ironically, attempts to correct the price of electricity to include the actual costs — a requirement for a free market — have been fought by the AEA.
A second failure of this argument is that American electricity is a public utility. It exists to provide the public benefit of having access to electricity, and it has always involved government oversight. While producing electricity at a reasonable cost is a responsibility of public utility commissions, the interests of the public are paramount.
Given that electricity is a public utility, it makes sense that the government would consider the public benefit in its electricity policies. Compared to fossil fuels, wind and solar energy create jobs, produce sustained local revenue and are less dirty. We should tax ways of producing electricity that are not in our best interests, and subsidize those that are. It’s not a war on coal, but a revolution of a better way to power America.