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Why is Texas changing its mind about wind power?

Texas became the country's biggest wind power producer thanks to generous subsidies; now it's poised to revoke them

SWEETWATER, Texas – It's said that everything’s bigger in Texas: big trucks, big hats and big oil.

Less known is that Texas is also home to big wind. The state accounts for more than 20 percent of U.S. wind power. In fact, if Texas were a country, it would rank sixth globally for installed wind power capacity.

At its heart is Nolan County, a 300-mile western stretch of the Lone Star State that's home to more than 1,300 wind turbines. Those wind farms supply up to 10 percent of Texas’ electricity.

"This county put us over Spain and put us over California, made Texas the leader, and made the U.S. a world leader," Greg Wortham, the former mayor of the county seat Sweetwater, told America Tonight. Gazing up at the towering turbines, he added: "There's nothing like it in the world."

In 1999, Texas was bullish on wind. To entice businesses to invest in renewables and reduce carbon emissions caused by fossil fuel, legislators passed a bill – a so-called renewable portfolio standard – that subsidized the wind industry. By most accounts, it was an enormous success. The industry hit its target for installed wind energy capacity 15 years early. According to the American Wind Energy Association, the industry now supports more than 17,000 wind-related jobs in the state.

Sen. Troy Fraser in March 2007.
Harry Cabluck/AP

But in an about-face, the man behind that bill, state Sen. Troy Fraser, is now pushing legislation that would end the subsidies he once championed. The bill would freeze the multibillion-dollar construction of transmission lines needed to supply the state’s central cities with power from West Texas wind. Without this network, the future of wind power in Texas is at least troubled, if not in jeopardy. The Texas Senate passed the bill 21 to 10. It now goes to the House, where it’s also expected to pass. The governor has given no signs that he would veto the bill if it comes to his desk.

Fraser didn't respond to America Tonight’s interview requests. But to understand his dramatic flip-flop, advocates of wind power say you need to follow the money. And an analysis of funding sources and tax filings by America Tonight and the Center for Public Integrity reveal how oil and gas interests have inserted themselves into this fight.

The playing field

Bill Peacock of the Texas Public Policy Foundation, a conservative think tank, has been in the trenches of the fight in Austin. He helped lead the charge to overturn Texas's renewable energy mandate and thinks wind is now a mature industry that has gotten more than enough help. His organization calculated that the total amount of subsidies granted to the Texas wind industry topped $1 billion in 2013, and has continued to climb. For Peacock, the fact that the wind industry met its capacity target so ahead of schedule is evidence that those subsidies are no longer needed. 

Bill Peacock of the Texas Public Policy Foundation, which opposes subsidies for the Texas wind industry.
America Tonight

“Why can't wind energy just survive on their own and compete like everybody else did in the level playing field?” he said.

The cost of wind power has plummeted in the last five years, and industry watchers say it's now essentially competitive with conventional energy. According to a study by the investment banking firm Lazard and reported by The New York Times, natural gas is priced at an average of 6.1 cents a kilowatt hour, compared to 3.7 cents for wind – without subsidies.

When asked if the Texas Public Policy Foundation is a mouthpiece for the fossil fuel industry, Peacock insisted the group is simply pro-market.

“We want the market to decide, and the market, ultimately, is consumers and producers getting together," he said. "We want them to decide what the best mix of fuel is in Texas to generate electricity.”

Advocates for wind energy say the playing field isn’t level. The fossil fuel industry receives billions in government subsidies through tax breaks, heavily discounted fuel and lax pollution control requirements. Over the past century, the federal government has subsidized oil and gas to the tune of more than $470 billion, Mother Jones reported, in the form of tax breaks that never expire.

“Wind and solar are the only things where the incentives come up for renewal constantly," said Wortham, the former mayor. "Oil and gas has had legitimate incentives since 1916." 

Why can't wind energy just survive on their own and compete like everybody else did in the level playing field?

Bill Peacock

of the Texas Public Policy Foundation

They say that industry is behind organizations like Peacock’s. A 2010 donor list from the IRS shows the Texas Public Policy Foundation receives funding from groups long associated with big oil, gas and coal, such as Koch Industries, the electric utility Luminant and the oil and gas investment company the Permian Basin Acquisition Fund. Tax-exempt nonprofits are not required by law to disclose donor information and the Texas Public Policy Foundation asserts that the IRS illegally leaked the information.

And according to political donation records at, over the course of his five election campaigns, Fraser received more than $215,000 from donors associated with the oil and gas industry, out of a total treasure chest of $3.97 million.

“Fundamentally, the big coal and oil and gas people are now being threatened by renewable energy because it's cheaper than they are,” said Tom "Smitty" Smith, Texas state director for Public Citizen, the consumer advocacy group based in Washington, D.C.

But Smith believes Fraser's reversal on wind power is primarily political.

"This is a way that he can say to the Tea Party, 'I've eliminated subsidies for renewable energy,' and get a Tea Party brownie point,'" he said. 

Town under threat

Former Sweetwater Mayor Greg Wortham speaks to America Tonight's Michael Okwu about the benefits wind power has brought to his town.
America Tonight

Two hundred and fifty miles northwest of the political showdown in Austin, former Mayor Wortham spends his time among the machines that play such a large role in the town they tower over. Wortham, who now heads the Texas Wind Energy Clearinghouse, an association of industry stakeholders, saw wind power revive his hometown when ranches and farms were struggling.

"Why undermine a $30 billion industry that's built new schools in your district, that's hired families at superior wages, that's given upward-mobility opportunities, that's saved a region that was dead?" he said.

Wind power has become the lifeblood of the town. And he's worried that the winds of change will wreak havoc from Austin to Sweetwater.

“The one or two or three people that are causing all this trouble, they don't suffer," he said. "They get on their jet and go somewhere else where there is electricity that day."

He fears that by revoking the subsidies, billions of dollars of investment might vanish – along with the good-paying jobs that gave his town a second life.

"We lose something that revitalized not just this region of Texas, [but] all up and down the Great Plains," he said. "The most forgotten part of the country falls back to where it was, and why?" 

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