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No, Texas has not given $19 billion in wind subsidies
The deadly winter storms last month that left millions of Texans shivering in their homes without power has reinvigorated the debate over fossil fuels versus renewable energy, as many tried to cast blame for the outages even though all types of generators struggled to produce during the freeze.
Among the renewable energy critics was Texas GOP Chair Allen West, who wrote on social media: "Since 2006 Texas has given $19B in taxpayer subsidies to wind energy companies. Over the past 2-3 years Texas has tripled our dependence on wind energy to 23-25 percent of our energy distribution system."
Those figures appeared high at first glance, but we wanted to check with experts. Here’s what we found.
Wind energy generators have received subsidies on the federal, state and local levels, as have other types of generators. West claimed that the state has given out $19 billion since 2006. The party’s spokesman Luke Twombly did not respond to multiple requests for an explanation of the number’s source.
Carey King, research scientist at the University of Texas and assistant director at the university’s Energy Institute, who wrote a paper on state energy subsidies, said he could not see how West was coming up with that figure.
The 2018 white paper that King co-authored looked at state-sponsored subsidies for various types of electricity generation.
The paper found that renewables do receive a lot more financial help than conventional technologies. Wind receives between $16 to $30 per megawatt-hour while conventional power sources receive up to $2 a megawatt-hour.
The wind number is so high because it includes the cost of $7 billion Competitive Renewable Energy Zone transmission lines, a ratepayer-funded project that helps bring power from West Texas wind and solar generators to large Texas cities hundreds of miles away.
Because the transmission line project is not a traditional subsidy and there is debate over whether it should be counted as such, the researchers opted to calculate state subsidies with and without it.
One argument for excluding it is that subsidies are usually meant to incentivize investment; however, in the case of the Competitive Renewable Energy Zone lines, consumers, not generators, are paying for an investment, the paper points out.
It adds that the wind farm developers aren’t the ones benefiting from cost savings here, but rather transmission and distribution utilities.
King added that the lines, which are also hooked up to traditional energy generation units, transmit more than just electricity produced by renewable generators.
If that project is removed from the calculation, researchers found that wind receives a comparable amount to other generators with $2 to $3 per megawatt-hour.
But even including the $7 billion, King said he has "a hard time coming up with that ($19 billion) number for wind."
King guessed that West might mistakenly be including federal production tax credits, which were established in 1992 and provide a tax credit for the first 10 years of electricity generation for large-scale wind farms.
An April 2019 report by the conservative think tank, the Texas Public Policy Foundation, came up with a similar number when estimating state and local subsidies in Texas that are to be paid out through 2029 at nearly $18 billion.
West’s tweet, however, implies the time period he is referring to is 2006 to the present.
Brian Phillips, a spokesman for the Texas Public Policy Foundation, confirmed that the figure referred to subsidies that extended through eight years from now.
The Texas Public Policy Foundation paper’s calculation included the transmission line project but claimed the true cost was more like $14 billion when factoring in costs to transmission companies to use the lines that the paper assumes will be passed on to customers through rate increases.
West’s spokesman, Twombly, said the party chair misspoke in the second part of the statement.
"The Chairman meant to put double in his tweet not triple," Twombly said in an email, referring to the state’s increasing dependence on wind power in the last two to three years.
Data from the state’s electric grid operator, the Electric Reliability Council of Texas, shows that wind grew from comprising 17 percent of the state’s energy mix in 2017 to 23 percent in 2020 -- an increase of 35.3%.
Asked about this, Twombly referred to an earlier PolitiFact that discussed how wind had become the state’s second-largest resource after natural gas since 2014, when wind provided just 11 percent of the state’s fuel. But that would be a five year, not a 2-3 year time frame.
West said the state has given $19 billion in taxpayer subsidies to wind energy companies since 2006. He also said the state is using three times as much wind energy as it was using two or three years ago.
Slicing the numbers various ways, it's impossible to arrive at West's $19 billion figure. And the wind energy composition has doubled, not tripled, over a five-year period, not a two to three year period.
We rate this claim False.
PolitiFact Texas writer Brandon Mulder contributed to this report.
Allen West Facebook post, Feb. 19, 2021
Texas Public Policy Foundation, The Cost of Renewable Energy Subsidies in Texas, Policy Perspectives, April 2019
Email interview, Brain Phillips, Texas Public Policy Foundation’s Chief Communications Officer, March 11, 2021
Email interview, Luke Twombly, Travis GOP spokesman, Feb. 23, 2021
University of Texas Energy Institute, State Level Financial Support for Electricity Generation Technologies: An Analysis of Texas and California, April 2018
Interview with Carey King, Research Scientist at The University of Texas at Austin and Assistant Director at the Energy Institute, Feb. 24, 2021
Electric Reliability Council of Texas, Fuel Mix Report: 2007 - 2020
Austin American-Statesman, Fact-check: Did renewable energy 'thrust' Texas into widespread power outages? Feb. 19, 2021
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No, Texas has not given $19 billion in wind subsidies
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