Taxpayers nationwide are funding subsidies for wind developers in states such as Iowa, Texas and California in what an energy executive calls "a racket."

“If they don't produce, they don't get the subsidy,” said Robert Bradley, CEO of Institute for Energy Research (IER). “They can produce and sell the electricity for nothing or even a negative price in order to get that tax credit. That's predatory in the sense that with an unheard of negative price in the market, no one expends their labor in order to pay someone to take it away.”

According to Bill Peacock’s Wind Subsidies and ‘Predatory Pricing’ in Texas study, Part 1, wind developers even sell electricity at marginal costs to gain market share.

“It's a subsidy racket and it's deceptive because the people who are paying for wind power are not only the customers but also taxpayers through the back door since it's a special tax provision, which means the rest of us or everyone else has to make up for it sooner or later,” Bradley told Washington D.C. Business Daily

Although subsidies typically cover one-third of the wholesale price, Bradley added that wind subsidies are hurting conventional power sources that don't get the same tax credit.

“It's driven nuclear plants, coal plants and, even in a few cases, natural gas plants out of the market because the wholesale price of electricity is driven down so much by wind power,” he said.

For example, generators Panda Temple Power, Energy Future Holdings and Exelon Generation Texas Power have filed for bankruptcy, according to Peacock’s second study, Wind Subsidies and Predatory Pricing in Texas, because they receive a better return due to subsidies regardless of the cost that renewable generators sell their electricity.

“The losers are the conventional generators that would be more profitable if wind wasn't able to price so low or negatively, and these conventional power sources are also the reliables,” Bradley said. “They are the ones that can produce at very predictable high rates.”

Ultimately, it is national taxpayers who must bear the cost. According to a third study by Peacock, Texas prices are rising thanks to the Public Utility Commission of Texas (PUC)’s artificial price adder.

“Texans paid approximately $3.6 billion more for electricity at the wholesale level,” Peacock states in the three-part series. “Similarly, retail electric prices in Texas increased by 6.8% last year, more than five times the 1.3% increase in U.S. retail prices.”