Gov., Legislature Should Repeal Costly Renewables Mandates
This Commentary first appeared in the Patriot News on December 26.
A lot can be spun from the results of the Nov. 2 election, but one fact is uncontrovertible: Pennsylvanians are sick of centrally planned, highly regulated, gimmick-driven economic policy. It hasn’t worked, and now they want results.
And is there a greater example of useless, wasteful government scheming than the commonwealth’s Alternative Energy Portfolio Standard? Coupled with the many subsidies and breaks granted to wind, solar and biomass interests, citizens get doubly whacked in their taxes and in their utility bills.
Outgoing Gov. Ed Rendell signed the state’s current AEPS in 2004, which requires major utilities to get 18 percent of their power generation from renewable resources by 2020. At least .5 percent must come from solar. This requires investor-owned utilities such as PECO Energy and PPL to drop some of their cheaper, more efficient sources of electricity like coal and gas, which keep your bills more affordable. By force of Pennsylvania law, the power companies will instead have to sell you—at a higher price—kilowatts created by wind turbines and solar panels.
Common sense tells most people (the exception being economics-challenged environmentalists) that this will inevitably increase overall electricity costs, which not only hit your power bill, but also pass through all industries and businesses into the products and services that you use. But there is a little bit of research that verifies these facts as well.
First is a study of a potential national Renewable Electricity Standard (RES, similar to an AEPS) conducted by the conservative Heritage Foundation, which unlike some federal studies, took into account the full costs of the implementation of renewables. Recognizing the intermittence of wind and solar, the need for backup generation for those sources, and the new investments in equipment and transmission that would be required (among other things), Heritage found that a national renewable electricity mandate would raise electricity prices by 36 percent for households and 60 percent for industries.
In addition, the study determined a national RES would cut national income by $5.2 trillion from 2012 to 2035, and cut national income by $2,400 per year for a family of four. Employment would be diminished by more than 1 million jobs.
At the state level, there have been studies of renewable portfolio standards in Massachusetts and North Carolina, both conducted by the Beacon Hill Institute, which is based in the economics department at Suffolk University in Boston.
In a study of 11 of the Bay State’s 25 green energy programs, Beacon Hill found those subsidies and mandates will cost the state’s ratepayers $490 million this year, more than $985 million in 2020 and more than $9.8 billion cumulatively through the next 11 years. Add in the state’s 14 other electricity regulations and undoubtedly the researchers’ estimate is quite low (which they acknowledged).
In North Carolina, Beacon Hill found the state’s “real disposable income will fall by $56.8 million by 2021” and “the state economic output measured in real state Gross Domestic Product will be $140.35 million lower than without the mandate.”
These forecasts, however, leave one thing out: What’s the benefit? The policies were ostensibly implemented (or proposed) for the purpose of helping save the planet from global warming. So what is the advantage gained in terms of reduction in the Earth’s temperature? That is something the climate alarmists who push these policies never tell you, because the answer is that they accomplish nothing.
All cost, no benefit: It ought to be a no-brainer for Gov.-elect Tom Corbett and the General Assembly to repeal the Alternative Energy Portfolio Standard.
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Paul Chesser is a senior fellow for the Commonwealth Foundation and is executive director of the American Tradition Institute.