A side note: what wasn’t a founding purpose of the REPS mandate

In my Carolina Journal column today I noted:

… North Carolina’s [electricity] rates have been among the most competitive in the nation.

That changed when the Renewable Energy and Energy Efficiency Portfolio Standards law passed in 2007.

The REPS mandate forced utilities to use an increasing proportion of highcost electricity sources for noncost reasons: to diversify the sources used, to use in-state resources, to encourage investment in renewable energy sources, and to improve air quality.

Since the REPS mandate took effect in 2008, North Carolina’s electricity rates have been losing their historical competitive advantage. They’ve increased by over twice the regional average increase and about 2.5 times the national average increase. Worse, those increases happened under the lowest levels of the REPS mandate.

An interesting side note: creating jobs in renewable energy was not a founding purpose for the REPS law. Now it’s the go-to excuse from renewable energy lobbyists for keeping it.

See, if you’re a lobbyist, that’s how you admit your industry’s too expensive. Tell politicians your industry uses more workers to make your stuff than your competition uses to make theirs, so they need to make people buy your stuff instead.

You put it this way: my industry creates jobs, but we need your support.1 As you know, politicians love creating jobs.

Plus, you don’t have to fill out the rest of the equation:

  • Requiring more paid workers to produce the same amount means it’s more expensive
  • A basic human need is something everyone has to get, unlike a luxury item
  • Making a basic human need more expensive means we’re all having to pay more than we should
  • All of us paying more for a basic human need means we have less spending money available for other stuff
  • Employers whose businesses provide other stuff have fewer customers, so they have less need for employees (and the same goes for the lower-priced industry competitors)
  • Which means jobs are destroyed more than they are created

It also means people are less well off than before. Paying more for something they absolutely need means their buying power is reduced. They can’t get as much other stuff.

Note
1 For a detailed explanation, read the lower section titled “Deploying Horsepower vs. Employing Horses” in my newsletter on reading economic impact studies.

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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