Would Efforts Backfire to Repeal Renewable Portfolio Standards?
Heartland Institute and ALEC are Risking Relevance
President Obama’s re-election is having little effect on efforts to roll back state laws mandating the use of green energy. The Heartland Institute is now teaming with the American Legislative Exchange Council (ALEC) to try and repeal those standards, arguing that they are increasing the cost of electricity.
What are their true motives? No doubt, the two favor free markets. But they are also getting their funding from sources long-opposed to the green movement and those that are challenging the authenticity of climate science. To that end, the same special interests are bankrolling studies that are used to lobby the 29 state legislatures that have enacted so-called Renewable Portfolio Standards.
The other relevant question is whether that initiative contradicts the national mood, which either explicitly or implicitly endorses green energy’s role in a modern economy. That is, President Obama was re-elected by a significant margin, winning 332 electoral votes to Mitt Romney’s 206, and a majority of the national vote. Should these opposition groups engage or should they fight on?
“ALEC is going to wake up and realize that the Heartland Institute, which is funded by special interests, is pushing them in a direction that’s making them irrelevant to, or at best out of touch with, the American public,” says Solar Energy Industries Association President Rhone Resch, in a Washington Post story. “And they can’t afford to do that.”
The same Washington Post story points out that ExxonMobil gave $736,000 to the Heartland Institute from 1998 to 2006. The Koch Brothers, who have oil and gas interests, also donated $25,000 in 2011. Other interests are not disclosed but the Heartland Institute had earlier been embroiled in a controversy in which it was revealed that a host of oil and coal businesses are its bankrollers.
State standards do require utilities to funnel investments in new technologies that they may not otherwise make. But the thinking behind such requirements is that they reduce the barriers to entry and help build economies of scale. In most cases, the green energy mandates have been tweaked but never repealed.
“Simply put, these policies force citizens, businesses, and an industry within a state to purchases renewable energy whether or not they value or can afford it,” writes Todd Wynn, director of ALEC’s energy and environment task force.
To be sure, mandating green energy is a more simplistic measure than actually complying with the laws. Indeed, the Edison Electric Institute has expressed concerns that those requirements are getting out ahead of the utility industry’s ability to deliver results.
Those power companies that now rely on coal will get hurt the most. If utilities have to buy the more expensive and less reliable green power, their electric rates will rise, say critics. Higher prices mean businesses are adding to overhead just as they are coming up for air.
“The challenge has been to change how we deal with renewables, to build it into our business so we make it into a profitable business for our shareholders,” says Eric Ackerman, director of alternative regulation for the utility trade group, in a previous EnergyBiz Insider story.
Consider California: Investor-owned utilities there generate 20 percent of their electricity from renewable energy, although most of that comes from hydropower. Getting to its 33 percent mandate by 2020 won’t be easy. The hurdles include transmission constraints, project finance and the difficulty of securing power purchase agreements at reasonable prices, says IHS Emerging Energy Research.
California Governor Jerry Brown is committed to a fair and successful outcome, emphasizing that special interest groups will not be allowed to subvert the process.
Lewis Milford, president of the Clean Energy Group, adds that the public, generally, understands and supports green energy policies. He previously told EnergyBiz Insider that green energy standards had once been the “province of the public utility commissions, but now the legislatures are fully involved in these decisions. There’s been a democratization of renewables policy.”
The renewed push by those think tanks averse to portfolio standards is coming when policymakers at all levels are trying to meet in the middle. And while the Heartland Institute and ALEC believe in their cause, they may end up undermining their arguments and reducing their relevance at a time when the Obama administration holds most of the cards.
EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been honored as one of MIN’s Most Intriguing People in Media.