Lawmakers in states across the nation are thinking twice about policies that drive up the cost of power. In fact, according to a recent report, fourteen states with renewable energy mandates are currently considering laws that repeal of significantly roll back provisions that require utilities to build or purchase more renewable power. An additional eight states considered such measures last year.
In North Carolina, for example, where renewable power sources and energy efficiency must meet a 12.5% standard by 2021, lawmakers are considering whether such a mandate makes sense anymore. Some critics have argued that North Carolina’s mandate could cost the state’s consumers hundreds of millions of dollars and close to 4,000 jobs. At least one of the state’s lawmakers agrees, offering the Affordable and Reliable Energy Act.
“What this bill does is try to soft land this business. To be competitive, you need to move off the taxpayer rolls,” says the bill’s sponsor, Representative Mike Hager, speaking of renewable power providers. “I see this as an entitlement program that is beginning to get its roots into our state. I see it as a regressive type tax.”
Meanwhile, in Washington state, a hotbed of environmentalism and the second state nationwide to adopt a renewable energy standard, critics are calling attention to the high cost of the measure. A study by the Washington Policy Center finds that the current law will cost power consumers in the state $1.22 billion by 2020, or about $170 per year per residential customer. Other consequences of Washington’s renewable power standard are as many as 11,885 jobs lost and more than a billion dollars in disposable income lost.
The U.S. is not alone, of course. While Germany is considered by many to be among the world’s leader in renewable power, the nation is scaling back subsidies for renewables in the wake of a backlash from voters and industry. According to a recent report by the Wall Street Journal, German consumers today pay a surcharge of about 7¢ per kilowatt-hour for renewable power, making up 14% of the nation’s total electric bill. Chancellor Angela Merkel, facing election in September, hopes that hitting the pause button on costly renewable power surcharges will placate voters who have seen their power bills skyrocket in the past decade.
Spain is taking a similar path, cutting subsidies to renewable power in an effort to soften the blow to ratepayers. The move will cut the cost to the Spanish electrical system by as much as €800 million per year. Renewable power generators are, of course, not happy with the move, but Spanish consumers should be.
“I believe we’re reaching a point where the bill for aggressive environmental measures is starting to come due, in the form of higher power rates and restricted economic growth,” explains PACE Executive Director Lance Brown. “Someone has to pay the cost of renewable mandates, and those people vote.”