May 7 - McClatchy-Tribune Regional News - R.A. Dyer Fort Worth Star-Telegram, Texas

Taxpayer assistance for the Texas energy industry totals billions of dollars annually -- a high price that can hide what consumers pay to cool their homes and fuel their cars -- according to a new report by Texas Comptroller Susan Combs.

Released Tuesday, the 443-page Energy Report 2008 shows state and local subsidies of $1.4 billion on energy produced in Texas, plus a similar amount of federal subsidies for Texas energy.

About 2.8 cents for every dollar spent on energy in Texas finances a local, state or federal subsidy, according to the report.

"As a result of this complex web of subsidies, Texans -- as both energy consumers and federal, state and local taxpayers -- pay more for some energy sources than is reflected in their electric bills, or the price at the gas pump," the report states.

Besides quantifying government breaks given to the energy industry, the report provides environmental and economic data on everything from nuclear power to electricity from municipal solid waste.

The report also reviews the regulatory climate for various types of energy, the potential impact on Texas wages and jobs, transmission costs and consumption levels.

Policymakers are grappling with the needs of a rapidly growing population concerned over rising utility bills and global warming. Further complicating the picture is the expected shutdown in the not-distant future of many of the state's largest power plants.

"This will not establish energy policy -- that is not the goal," Combs said.

"But it will give policymakers information from which they can derive what they think is useful policy by putting everything [relating to Texas energy] in one place," she said.

The report notes that Texas leads the nation in both energy consumption and energy production and that nearly half of all electricity in Texas is generated from natural gas.

The next most-popular fuel sources are coal, which produced 36.5 percent of the state's electricity, and nuclear, at 10.3 percent, according to the report.

But nuclear power also gets some of the largest subsidies, the report notes. Federal taxpayers subsidize nearly 21 cents of every dollar spent on nuclear power, according to the report.

The only energy source with a greater subsidy -- nearly 27 cents of every dollar spent -- is ethanol.

By contrast, nearly 12 cents for every dollar spent on wind energy is subsidized by federal and state taxpayers, according to the report.

It also notes high transmission costs associated with wind power.

Combs said Tuesday that subsidies can have unintended consequences -- especially when policymakers favor "winners" by providing greater subsidies for one fuel source over another.

"Such assistance must be applied carefully," the report says. "Public policies that attempt to pick winners in the race for new energy technologies are an inefficient way to achieve policy goals and run the risk not only of wasting taxpayer money but also of directing private investment away from more promising use."

By the numbers

1 Texas' ranking among states for energy consumption.

1 Texas' ranking among states for energy production.

11.5% Proportion of U.S. energy consumed in Texas.

50% Proportion of Texas' energy used by industries.

14.9% Proportion of the Texas gross domestic product in 2006 generated by the oil and gas industry.

Sources: The Energy Report 2005; Texas comptroller of public accounts