Dueling Energy Subsidies are Equally Bad

Article By: Commonwealth Foundation

Shortly after Pennsylvania lawmakers suggested subsidies for nuclear power plants, the federal government launched a new effort to subsidize not only nuclear power but other forms of energy as well.

Earlier this month, President Trump ordered Department of Energy Secretary Rick Perry to stop the closing of nuclear and coal plants, whose continued operations are threatened by competition from cheap natural gas. Interestingly, irrational regulations and subsidies for competing “green” energy sources are also a threat.

Next, a report from the Central Pennsylvania Business Journal. The paper showcased the efforts of a new group to give landowners “the expertise and tax incentive for putting up renewables on their farms.”

What to think of these dueling proposals for energy subsidies to competing energy sources? The Clear Energy Alliance released two videos with a balanced discussion.

The first video, “Nuclear Subsidy Contagion,” calls for a wider public discussion of nuclear subsidies before states, such as Pennsylvania, impose additional costs on electricity customers. While acknowledging the environmental benefits and reliability of nuclear plants, the video notes the costs of subsidies are substantial. Subsidies are estimated to cost as much as $7.6 billion over 12 years in New York and $3 billion over 13 years in Illinois.

In a second video, “Solar’s High Cost Jobs,” the Clear Energy Alliance traces the number of workers it takes to produce a given amount of energy. In the coal industry, one worker can produce 7,745 megawatt hours of energy. The natural gas industry requires two workers to produce the same amount of energy. In the solar industry, a whopping 79 workers, despite receiving 350 times the subsidies of fossil fuel industries.

When discussing energy strategies, accounting for the reliability of the electricity grid and national security are appropriate considerations. However, subsidizing any energy source to “save” jobs or advance the most popular energy source of the day will unfairly burden electricity customers without providing much benefit.