Archived Story

Renewable-energy mandates have high cost

Published 9:33am Thursday, May 16, 2013

Motivated by a desire to reduce carbon emissions 29 states, Puerto Rico and the District of Columbia have required utility companies to deliver specified minimum amounts of electricity from “renewable sources.”

Proponents say the mandated restrictions will reduce harmful emissions and spur job growth, by stimulating investment in green technologies.

The patchwork of states rules — affecting the electricity bills of about two-thirds of the U.S. population as well as business and industrial users – has sprung up in recent years without the benefit of the states fully calculating the costs.

Growing evidence that the costs may be too high — that the price for purchasing renewable energy, and building transmissions lines to deliver it, may outweigh any environmental benefits and be detrimental to the economy, costing rather than adding jobs.

The higher cost of electricity is essentially a carbon-reduction tax that puts a strain on a struggling economy and is falling most heavily on the least well-off among residential users.

Increased regulation of coal-fired plants is another reason for rising electricity costs. This adds to the difficulty of isolating the cost of renewables.

Analysis of available data has revealed much higher rates in states with mandates compared to those without.

Seven coal-dependent states with mandates saw their rates soar by an average of 54.2 percent between 2001 and 2010, more than twice the average increase experienced by seven other coal-dependent states without mandates.

Another pattern emerging is the disconnect between the optimistic estimates by government policymakers of the impact of the mandates and the harsh reality of the soaring rates that typically result.

In some states implementation is proceeding so rapidly that users are being locked into exorbitant rates for many years to come. California and Oregon serve as case studies of how rates have spiraled.

Projects being built in California are so expensive that “people are going to get rate shock.”

Joe Como, acting director of the Division of Ratepayer Advocates, an independent consumer advocacy arm of the California Public Utility Commission, said the approval of overpriced renewable energy will harm “the states’ efforts to achieve greenhouse gas reduction.”

Given the mandates have not received enough study and that they appear to be posing risks to a fragile economy, state programs should be put on hold. Until a thorough cost-benefit analysis to determine responsible levels of renewable electricity, existing mandates should be suspended and new ones blocked.

All of the above excerpts are from an Energy Policy and the Environmental report titled The High Cost of Renewable-Electricity Mandates.

Robert Bryce, the author, is a senior fellow at the Manhattan Institutes’ Center for Energy Policy and the Environment. He has been writing about energy for a couple decades and has had articles published in the Wall Street Journal, the New York Times, the Atlantic Weekly and the Washington Post. His fourth book, Power Hungry: the Myth of “Green” Energy and the Real Fuels of the Future, was published in 2010.

This entire report can be accessed by Googleing “The High Cost of Renewable-Electricity Mandates.”

The mission of the Manhattan Institute is to develop and disseminate new ideas that foster greater economic choice and individual responsibility.

 

Joseph P. Smith is the president of Pyro-Chem Corporation in South Point.

 

  • http://www.tytandan.com 79Tiger

    Hey Deist. Put your buck where your bang is. Go off grid. Do not use any energy source other renewable sources. Take a stand. Al Gore would be proud of your stand but not stupid enough to join you. He counts on people like you to support his grandiose lifestyle.

    (Report comment)

  • mickakers

    mikehaney; It appears you are permitting dollar signs to influence your common sense, good judgement, care and concern for the environment and it’s peoples.

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  • mikehaney

    California–sounds like your kind of place Mick.
    ————————————-
    California often takes credit for being a leader among the states in setting policy and serving as an example, but the question is where is California leading? California is rich in conventional and renewable energy resources, but instead of using these conventional energy resources, the state puts obstacles in the way of conventional energy, which is leading to much higher energy prices for Californians. California has one of the highest gasoline prices in the continental United States despite being a large oil producer and despite being home to large oil deposits. California has the highest residential electricity rates in the western United States—33 percent higher than Nevada’s, 44 percent higher than Arizona’s, and 58 percent higher than Oregon’s. These higher prices are the direct outcome of California’s burdensome regulation on the use and production of energy, and that regulation costs the state and its residents, jobs, investment and revenue. Its policies are making the state poorer, in much the same way similar policies in Europe have contributed to economic stagnation there.
    ———————–
    And the last I heard, is that Europe is taking another look at investment in renewables. Another stranglehold on their economy.

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  • mickakers

    mikehaney; As a PS: My comment, “I must admit, I do enjoy reading your comment, not that I take them serious.” Refers to your opinions on energy sources and Labor Unions only, so far! Take care Michael and give Miki my regards, miss you all.

    (Report comment)

  • mickakers

    mikehaney; Is it snowing at Lawco Lake? Your comments suggest this. Come-on Mike, face up to the facts. Your antiquated mentality is showing. Look to the future and the betterment of mankind when it comes to energy sources. I must admit, I do enjoy reading your comments, not that I take them serious.

    (Report comment)

    • mikehaney

      It’s easy to draw retirement and sit back in your easy chair and think you know what’s going on in the rest of the world.
      You don’t have to look for a job,clothe and feed your children, get them to school,take them to the doctor, spend money on driving to work(if so lucky) and to school maybe,buy a car and keep it running,pay for life insurance,health insurance,car insurance,heat and cool your home(for a family),wash clothes,wash dishes, (heat the water for last two)make school lunches,buy sporting equipment. More, but help from a couple with kids could go on and on.

      (Report comment)

  • deist

    79 tiger once again you show yourself a follower of out of date, out worn and out moded thinking. If there is a crack in your windshield, should you wait until it completely cracks to fix it? Of course not, and excuse my elementary example. But it is really that simple. Just think how much better off we would be right now, if we as a nation had made drastic changes during and immediately after the Oil embargo of 74. Now is always the right answer for change.

    (Report comment)

  • http://www.tytandan.com 79Tiger

    Don’t destroy what works in favor of something that has not been shown to be a reliable & affordable source of energy. It really is as simple as that. Those that have no answer want to complicate things with “what ifs?”

    (Report comment)

  • mikehaney

    New Hampshire ratepayers consumed nearly 11 million megawatt-hours in 2012. If supply is shifted just 10 percent from natural gas to onshore wind (which is the cheapest renewable alternative) it will cost New Hampshire ratepayers an additional $21 million in electricity charges; biomass would increase rates by $48 million and solar up to $213 million. It’s clear that renewable portfolio standard policies are detrimental to electricity rates.

    But what about the environment? This is certainly the case where good intentions have driven half-baked policy. Renewable portfolio standard rules have a negligible impact on global carbon dioxide emissions, especially when China, India and other developing nations are using fossil fuels at steadily increasing rates.

    More importantly, solar and wind aren’t exempt from negatively impacting the environment. The manufacturing of solar panels produces millions of pounds of hazardous waste containing lead and cadmium, a known carcinogen. The waste is then transported via truck or rail to dumps that are hundreds and often thousands of miles away — not exactly the greenest way to produce green energy.

    Windmills currently sit on over 9,000 square miles of our landscape — roughly the size of New Hampshire — and over 14,000 abandoned windmills are littered throughout the country. The environmental benefits touted by proponents are mostly outweighed by the more serious impacts they don’t want to discuss.

    What do ratepayers get for the billions in subsidies, loan guarantees, carve-outs, mandates, millions of pounds of toxic waste, obstructed views and dead birds? Not much. The combined electricity provided by all the wind and solar power in New England over the course of an entire year is generated by our traditional sources of electricity in less than five days.

    Despite meager contributions to the county’s electricity grid by “clean” generators like solar and wind, air quality has improved dramatically. According to the EPA, between 1980 and 2011, gross domestic product increased 128 percent, vehicle miles traveled increased 94 percent, energy consumption increased 26 percent, and U.S. population grew 37 percent. During the same time period, total emissions of the six principal air pollutants dropped 63 percent.

    In a nutshell, ratepayers receive no real benefits from renewable portfolio standards while paying a lot more for their electricity. Meanwhile, our legislators and their bureaucrats continue to obfuscate the costs to ratepayers through RPS mandates. The citizens of New England should stand up and fight these attempts to pull the wool over the ratepayers’ eyes in the name of green energy and faux environmental protection. It is time to repeal renewable portfolio standards and free ratepayers from the whims of the political class.

    Marc Brown is the executive director of the New England Ratepayers Association, a nonprofit dedicated to protecting ratepayers.
    ————————————-
    The way Washington is pushing renewables, what would they do if the people in northern states went back to wood and coal burners to stay warm in the winter? Would the EPA police be knocking on their doors?

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  • mickakers

    Joseph P. Smith; I would be interested in hearing what services Pyro-Chem Corp. provides and to whom they provide it to. Geologic & Business is a rather broad description, being a little more specific would shed light on your comments.

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  • mickakers

    Joseph P. Smith; I always enjoy your articles. Your pessimism and antiquated way of thinking bring back memories of the past. Thank God we did not listen to those pessimistic and antiquated views and ideas, otherwise, we would still be riding horses and saying, flying was for the birds. You are permitting dollar signs to cloud your vision.

    (Report comment)

  • mikehaney

    Joseph P. Smith-another darn good article.

    (Report comment)

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