It looks like Xtreme Power, the Kyle-based manufacturer of state-of-the-art batteries for storing renewable energy, is close to expanding its manufacturing capacity by locating a new plant in Michigan. It is moving its manufacturing facilities north to take advantage of Michigan’s offer of mega-subsidies, even though Texas has an ownership stake in the company through the Governor’s Emerging Technology Fund. This is an excellent case study on several fronts.

First, real economic development. Texas gave the company $2 million of seed money to get started here a few years back. I don’t agree with that, but it is small change compared to the $1 billion or so that is being used to lure them to Michigan. Lesson: Keep your taxes and regulations low and companies will move and stay here with little or no taxpayer dollars needed. Keep taxes and regulations high and you’ll need to drain taxpayers’ wallets to lure companies to your state to replace the jobs lost from the companies that have moved to other states-like Texas!

Second, renewable energy. This just shows how uncompetitive wind energy really is compared to coal, nuclear, and natural gas. This company is going to get a billion dollars in government subsidies to build batteries to store electricity from wind turbines. Maybe, just maybe, that billion dollars-along with the per-kWh and REC subsidies-will allow wind-generated electricity to be competitive with electricity generated from traditional sources. That all depends on if the batteries work and can actually store enough electricity to make the wind system reliable.

Third, government ownership of private companies. I suppose we can’t complain about Texas having a 4% stake in the billion dollars worth of subsidies from Michigan and the feds. But do we really want Texas to own Xtreme Power, any more than we want the feds to own GM? Seems like we are doing well enough with getting and keeping businesses here without becoming shareholders. And how about we cut taxes for everyone by $2 million rather than giving that cash to one business-that then picks up and moves to Michigan!

– Bill Peacock