Government Powers Private Business through Green Energy Grants

Ohio’s government is picking winners and losers of private industry with its green energy grants.  The real and possibly not-so-obvious losers, however, are Ohio taxpayers.  How does providing energy for a private business benefit the general public?  Unfortunately, the only real benefactor is the subsidized company’s bottom line.

One case is particularly ironic:  the Ohio Department of Development in conjunction with the federal government gave roughly $400,000 to the Byers Auto Group for the purchase of two wind turbines.  This company isn’t trying to find a greener way to produce cars or make them run.  No, this company sells cars – the antithesis of the green movement.

Due to the enormous subsidy, Byers Auto Group stands to make great gains off the taxpayer dollar.  Although the entire project cost about $600,000, Byers only paid one third of the price.  With the estimate that Byers will recoup its costs in only seven to ten years, these turbines will significantly reduce energy expenditures and will thereby increase the company’s profit margin.

As a direct result of the subsidy, Byers now pays a lower rate on energy than the rest of central Ohio.  Assuming the turbines last their projected lifespan of 20 years and produce the yearly estimate of 175,000 kilowatt-hours, Byers will only pay 5.7 cents per kilowatt-hour for energy while the rest of Columbus is paying 7.2 cents per kilowatt-hour.

This sounds like a tremendous deal, does it not?  If wind power only costs 5.7 cents per kilowatt-hour, then why don’t we all buy turbines?  As the old adage says, if it’s too good to be true it probably is.

While it is true that Byers is going to have tremendous energy savings, the other truth is that you, Ohio taxpayer, are picking up the tab for the other 11.4 cents per kilowatt hour it costs to produce energy for these car dealerships.

Not only is Byers getting a much reduced rate on power, it also can profit from excess power produced.  Any surplus will be sold back to AEP through the grid.

The total cost of power produced by these two turbines is 17.1 cents per kilowatt-hour, while the current rate for traditional energy is only 7.2 cents per kilowatt-hour.  Clearly, wind turbines are not an economically viable energy source at this time.  Otherwise, businesses would be willing to invest in them with no government assistance necessary.

Subsidy aside, since when is it the Department of Development’s role to help a profitable business pay for power? So many other struggling entities around the state could use this kind of financial boost.  Or better yet, Ohio taxpayers could have kept their hard-earned money.

Buying power for a car dealership does nothing to promote economic development in Ohio, especially considering that these turbines were manufactured in Vermont.  Promoting job growth in Ohio should take precedent over creating jobs out of state.

It’s too bad the Department of Development isn’t as dedicated to keeping businesses in Ohio and attracting new businesses to the state as it is to giving sweetheart deals to already successful private companies on the taxpayer dime.

With wasteful programs like this, it is no wonder that Ohio is plagued with the seventh highest state and local tax burden and has a looming $8 billion deficit.

This article was written by Mary McCleary while she worked at the Buckeye Institute.