by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
In this weekend’s WSJ, Donald Bryson, state director of the North Carolina chapter of Americans for Prosperity, and Jeff Glendening, state director of the Kansas chapter, write about their states’ respective efforts in capping or repealing the last two decades’ costly experiments in mandating expensive renewable energy. They put those cap and repeal efforts in the greater national context and in the proper perspective of their rate-hiking effects on consumers:
Our states aren’t the only ones having second thoughts. In 2014 Ohio froze its RPS law at 2.5% for two years, pushing the final target of 12.5% back to 2026. West Virginia eliminated its mandate outright in February. The other 25 states with renewable portfolio standards would be wise to follow suit. These laws were in vogue from the late 1990s to the late 2000s as lawmakers sought to demonstrate their green credentials. …
These laws force states to increase renewable electricity generation, regardless of whether it makes sense for the local economy. New solar and wind farms cost substantial sums, which are then passed on to individuals and businesses through higher energy bills. Even once they are up and running, the electricity they generate costs a pretty penny.
A June study by the Institute for Energy Research shows that electricity generated from new wind farms is between two and four times more expensive than electricity from existing coal, natural gas and nuclear plants. Compared with new fossil-fuel plants, electricity from new wind farms is between 15% and 54% more expensive. As for solar, EIA data show it will continue to be significantly more expensive than competitors for at least the rest of the decade, and likely far beyond.
Electricity prices in most states with RPS laws are “starkly higher,” according to a 2012 Manhattan Institute report. The difference was especially striking in coal-dependent states: “Seven such states with RPS 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.”
Nationally, federal data from the Energy Information Administration (EIA) show that electricity is, on average, 22.9% more costly—24.2% for residential customers and 21.4% for industrial—where RPS mandates are in effect.
Our home states bear this out. EIA data show that over the past half-decade North Carolinians’ electricity rates rose twice as fast as they did in neighboring states, none of which have RPS laws. Today, our rates are nearly 2% higher than our neighbors’, and prices would increase further if targets for wind and solar, which now account for only about 3% of generation, are ratcheted up. In Kansas, where 19% of electricity came from wind in 2013, electric rates are on average 16% higher than in neighboring states.
Interested readers on issues surrounding North Carolina’s renewable energy portfolio standards (REPS) mandate can click on the categories or tags below or read my newsletter archive.