Energy Mandates a Double Whammy

Alternative energy mandates raise the cost of living and make it harder for people to find work. These are the findings of a new paper on the government's futile efforts to manage the energy sector.

According to the paper's author, Dr. Timothy J. Considine, the mandates will adversely affect Pennsylvania, raising energy costs by $700 million and eliminating 11,400 jobs by 2025.

In 2004, Pennsylvania enacted the Alternative Energy Portfolio Standards (AEPS). These mandates require 18 percent of all electricity to be generated from renewable sources by 2021.

More than 98 percent of the new renewable energy capacity for Pennsylvania is supplied by wind power. This means electricity production at coal and natural gas plants fluctuates (or cycles) to accommodate times when the wind does not blow. But cycling reduces efficiency and raises costs.

In 2013, coal remained the largest source of Pennsylvania power, followed by nuclear power at 34 percent and natural gas at 22 percent. In comparison, wind power accounts for only 1.5 percent of total generation.

The high cost of renewable energy mandates isn't unique to Pennsylvania. By 2025, the mandates will destroy more than 150,000 jobs and increase electricity costs by $23.1 billion in 12 states.

If lawmakers want to shield Pennsylvanians from this economic damage, repealing the AEPS and/or refusing to extend the program should be a top priority. Rep. Sankey offered the lastest repeal bill back in 2013. 

Costs of Pennsylvania RPS in 2013 dollars (millions)

 

 2016 

 2020 

 2025 

 2030 

 2035 

 2040 

RPS Legacy Costs

 

 

 

 

 

 

Direct

$210

$206

$201

$196

$192

$187

Cycling Costs

$20

$28

$31

$32

$33

$35

less Fuel Costs

$57

$60

$64

$66

$68

$71

Net RPS Legacy Costs

$173

$174

$168

$162

$156

$150

New RPS Costs

 

 

 

 

 

 

Direct

$324

$544

$622

$651

$680

$710

Cycling Costs

$21

$29

$32

$33

$34

$36

less Fuel Costs

$216

$384

$437

$463

$490

$523

less NGCC Costs

$3

$0

$12

$12

$12

$13

Net New RPS Costs

$125

$189

$206

$209

$212

$210

RPS Tax Subsidies

$203

$291

$326

$343

$361

$379

Total RPS Cost

$502

$654

$701

$715

$729

$741