Renewable energy lobby’s shell game

My report last week exposed misleading data being pushed on lawmakers by the renewable energy lobby. The lobbyists were pushing a new statistic, that the renewable energy portfolio standards (REPS) and associated renewable energy mandates are not the primary driver of higher electricity costs in this state … since 2001.

Three out of four drivers of higher electricity prices in N.C. are from renewable energy policies, but not the fourth, which is primary driver. Utility investments are the primary driver of higher rates, per the report.

As I point out in my report:

  1. Why go back to 2001 when the policy in question started in 2008?
  2. If you must go back to 2001, why not discuss the impacts on utilities of the Clean Smokestacks Bill of 2002?

Average residential electricity rates in North Carolina, 1990–2012

NC elec prices

As for (1) the lobby’s decision to start tracking the rate effects back in 2001:

To track the rate impact of a policy change, it would seem sensible to start at that point of the change — in this case, when the REPS mandate took effect in 2008. Adding in all those previous years’ worth of data unaffected by the policy change would statistically water down the actual effects of that change.

Since 2008, the state’s electricity rates have grown dramatically in comparison with the national average. According to the March 2015 Energy Report by the North Carolina Department of Environment and Natural Resources (DENR), “North Carolina’s rates have increased more than 2.5 times the national average increase since 2008.”

As for (2) the lobby’s decision to avoid discussing the effects of the Clean Smokestacks Bill of 2002,

The costs of complying with the Clean Smokestacks Bill have skyrocketed since the bill was first proposed. … By June 2009, according to the annual report to DENR on the status of Clean Smokestacks, the costs were projected to be over $3.2 billion, over seven times the initial estimates.

How much of the non-renewable-energy-driven rate hikes in North Carolina since 2001, which includes seven years not affected by the REPS mandate, are driven nonetheless by compliance with Clean Smokestacks?

The NCSEA report doesn’t say — nor even venture to alert legislators who could be concerned about rate hikes that it might be a significant factor.

The impression given is of the utilities making “large, long?term investments in conventional energy resources” knowing that “the costs of these investments are passed on to their customers” so that “it can be easily understood that conventional resources are the primary driver of utility rates.” That image would be different, however, if a significant proportion of those investments came about because of environmental compliance as opposed to mere monopoly utility indifference to captive ratepayers.

My report offers several other criticisms of this lobbying effort as well.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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