Have you wondered how much PGE's new generating facility, the ethanol plant and its product at Port Westward has actually cost the taxpayers? PGE's Customer rates will rise by 2.8% to begin recovering the cost of the new $300 million Port Westward generation plant as soon as the generator came on line. The increase was significantly lower than the 4.3% that PGE initially asked for, the difference in what PGE asked for and the final rate was reduced by about $49.4 million by the Public Utility Commission.
The average residential bill will increase about 48 cents per 1000 KWH energy consumed. The Port Westward facility will provide enough energy to service about 300,000 homes per year and PGE has about 800,000 current customers.
Columbia County has incurred a debt of about $34 million to expand the rail and road services into Port Westward industrial area; with incurred interest the taxpayers will have paid approximately $52-54 Million for the project. You can check and see how much you are paying each year for the improvements by taking a look at your property tax statement under COLCO Development Agency.
Government subsidies are often thought of as cash expenditures from the government to a private firm. While cash grants are subsidies, there are many other more intricate methods that governments use to shift value to the private sector. These include reduced tax rates on government-provided loans or insurance at below-market rates; guarantees on private loans; special requirements or bans that affect either biofuels or their substitutes; and surcharges or tariffs on competing products. All in all these special deferrals subsidize ethanol and bio-diesel in the United States.
The Energy Tax Act of 1978 was the first of many subsidization's for ethanol. The Act reduced the motor fuels excise tax for ethanol-gasoline blends. Originally set at 4¢per gallon of gasohol--a blend of 10 per cent ethanol and 90 per cent gasoline, also called E10--equivalent to 40¢/gallon of pure ethanol. The exemptions changed frequently over the years.
The Volumetric Ethanol Excise Tax Credit (VEETC) replaced the Energy Tax Act of 1978 in 2004. The General Accounting Office estimated that the revenue loss from the excise tax decrease over the 1980-2000 period was between $8.6 billion and $12.9 billion. The idea that these special incentives cost the taxpayer nothing is absurd, while politicians or project consultants speak of grants to help off set the cost of developing biofuels, the bottom line is that the taxpayer are the ones paying for these projects in all stages of development to the completed project or product. To say that ethanol is a cheaper substitute for gas is simply not true, if you figure in all the tax breaks, subsidies, grants and other loopholes plus the higher price of food items, because of the grain being used for ethanol instead of staples, and also the higher cost of feed for animals also needs to be considered in the mix.
There is another question that is very important in this equation; with the falling gasoline and diesel prices is it economical to continue to make ethanol? Can ethanol be produced at a price comparable or cheaper than imported gasoline? Can it be done without taxpayer funds? I don't think so, the price to make one gallon of ethanol is about $3.00 per gallon, for one gallon of gas-finished product, and profit is about $1.68 per gallon.
Another problem in the forefront of the ethanol producers is the competition of imported ethanol mainly from Brazil. In the beginning there was a tariff placed on all imported ethanol in an effort to help domestic production, but in 2007 the tariff was invalid. Political efforts are working to reinstate tariffs and to develop a set floor price on oil to protect the domestic ethanol industry.
In 1989 the price of corn was high and the price of gas was falling so the government gave ethanol producers $70 million in free corn some people would consider this corporate welfare I certainly do. Now a days the government does not directly give away free corn, they are a bit more sneaky about give always, they do it through farm subsides, but still the taxpayers are funding this industry very heavily. In fact, the taxpayers have been subsidizing this industry for 28 years, and will probably continue to do so for the next decade. Who knows how this rocky industry will fair in the next decade with electric cars being developed and with the world market so volatile. All I know, as a nation we need to drive more fuel-efficient cars, for the sake of the planet as a whole. But after all is said and done, just how much are we paying for our "green" fuel? And just how much of our money is padding the pockets of some huge corporation's like ADM who for years has their hand in the ethanol saga receiving their "free money"