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Richard Caperton's calculations based on
 Energy Information Administration data.
Twenty-nine states and the District of Columbia have renewable energy standards. These require that a certain percentage of electricity in each of them must come from renewable sources by a certain date. The percentage varies (from 10 percent to 33 percent) and different technologies are allowed from state to state—everything from wind to landfill gas. Results: reduced pollution; new businesses and invigorated old ones; expansion of clean-energy jobs; ever-cheaper devices for capturing power from sun, wind, biomass and geothermal sources; and less carbon dioxide emitted into the atmosphere.

Bolstered by Grover Norquist of Americans for Tax Reform, and funded by the likes of Exxon Mobil and the Koch Brothers' energy and chemical conglomerate, the American Legislative Exchange Council has embarked on a campaign to get states to dump those standards.

Stephen Lacey writes that ALEC has already tried to prevent passage of targets for renewable energy on the federal level. But since those aren't happening anyway, certainly not this election year, the organization is focusing on the states. ALEC's key argument? Consumers in states with the standards are seeing their electricity rates soar.


Norquist claims that consumers in states with the standards for these "less reliable" sources of electricity are paying 39 percent more than those who live in states without the standards. Robert Bryce at the Manhattan Institute claims that the higher prices not only outweigh the environmental benefits but are "detrimental to the economy, costing jobs rather than adding them."

Not so, according to a recent study by Richard W. Caperton at the Center for American Progress. While he agrees that states without the standards may have lower rates, he points out that rates are set by state utility boards in a complex process using a baker's dozen of ingredients. Most studies have done a poor job of isolating the effects of each of these from one another.

Caperton chose the methodology developed by Emily A. Hickey and J. Lon Carlson to assess rate impacts of electricity restructuring in general for his examination of rate changes caused by renewable standards. Key to their methodology? Using a national average to assess how a state’s rates were changing before restructuring and making the same comparison for the post-restructuring period.

Caperton calculated the average annual rate increase before the first year a renewable energy standard came into effect and compared it to the average for states without the standards for the same period. He then ran the same comparison for the years after the standard was implemented. You can see the results in the table to the right. For renewable energy standards that became effective in 2010 or 2011, the methodology doesn't work because not enough data are available yet. That's what the N/As are about in the final eight states in the table.

Bottom line? If ALEC and the other naysayers were right about renewable energy standards being costly for consumers, electricity rates would be increasing faster after the standards went into effect. As can be seen in the “post-standard” column, that is not the case:

Look at Maine, for example. Before its renewable energy standard
went into effect, Maine’s rates were rising 3.42 percent faster than in
states without a standard. After the standard went into effect, however,
Maine’s rates were actually rising 0.82 percent slower than in states
without a renewable energy standard. [...]

This shows that state renewable energy standards have no predictable impact on electricity rates. [...]

The conclusion is clear: Anyone who says they’ve looked at all of the states and found
that renewable energy standards drive up rates is wrong. There are no data showing a
nationwide pattern of these standards leading to rate increases for consumers.

State studies back up this conclusion.

Demolishing the states' renewable standards is the opposite direction we should be headed. We instead need a federal standard, similar to what Sen. Jeff Bingaman, the New Mexico Democrat, introduced in February, although critics are not happy with his inclusion of nuclear and natural gas. States themselves should push for higher standards. But with ALEC pushing its corporate agenda, it will take a combination of business, labor, environmentalists and those consumers ALEC pretends to care about to defeat this attempt to scuttle some of the smartest legislation of the past decade.

Originally posted to Meteor Blades on Tue Apr 24, 2012 at 03:37 PM PDT.

Also republished by American Legislative Transparency Project and Daily Kos.

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