Wind Subsidies for Xcel Energy’s Minnesota Operations Totaled More Than $49 Million in 2016

According to data found in utility documents filed with the Minnesota Public Utilities Commission, Xcel Energy earned $49.3 million in federal subsidies in 2016 from its wind facilities located throughout Minnesota and North Dakota. It’s important to remember that the cost of wind energy in Minnesota is not just reflected in your monthly electric bill, but it also increases the amount of federal taxes you must pay.

While $49 million is no doubt a significant chuck of change, it likely represents only a small amount of the federal subsidies doled out to wind producers in Minnesota because most of the wind power generated in Minnesota comes in the form of power purchase agreements (PPA’s) between independent power producers (IPP’s) and utility companies.

These IPP’s do not have to file similar paperwork with the PUC, so we can’t really be sure how much of their wind generation qualifies for the PTC, but the fact that 73 percent of the wind generated in 2016 came from these IPP’s means the amount of federal tax money paid to Minnesota wind producers is probably much higher than the $49 million reaped by Xcel Energy.

It’s important to remember that subsidies, and not free-market decisions, are the driving factor behind building wind facilities. In fact, the Energy Information Administration estimates wind farms construction will plummet once the subsidies expire, as shown in the graph below.

It’s like Warren Buffett said, the only reason to build wind turbines is to harvest the tax credits.