NCPA - National Center for Policy Analysis

States Show Folly of Energy Mandates

April 9, 2013

Many think the next play by the Obama admiration will be for a national renewable energy portfolio standard (RPS) that would mandate that a certain percentage of the nation's electricity be produced from renewable sources. Fortunately there are the states to show us the negative impact that a national renewable energy standard would have, say Grover Norquist and Patrick Gleason of Americans for Tax Reform.

  • Twenty-nine states and the District of Columbia already have a renewable energy mandate on the books.
  • These mandates inject government into the business decisions of utility companies, requiring them to procure energy from more costly and less reliable sources than they otherwise would.
  • The increased energy costs produced by renewable mandates are passed along to consumers in the form of higher utility bills.
  • According to the Institute for Energy Research, utility bills in states with a renewable energy portfolio standard (RPS) are 40 percent higher on average than in states without one.

In 2007, North Carolina became the first state in the South to impose a renewable energy portfolio standard. North Carolina residents are all too aware of the way in which energy mandates drive up consumer costs.

  • During the decade immediately preceding enactment of the state's renewable energy mandate, utility bills in North Carolina grew by an average of 1.7 percent per year.
  • Since the mandate's imposition in 2009, utility bills have increase by an average of 2.29 percent -- a 33 percent jump compared to the annual rate of growth prior to passage of the state's RPS.
  • A John Locke Foundation study found that North Carolina's renewable energy mandate, if it remains in place, would increase electricity costs for consumers by $1.8 billion and result in the loss of 3,500 jobs by 2021, the year in which the law is fully phased in and requires North Carolina utilities to generate 7.5 percent of their electricity from renewable sources.
  • The report also found that the state RPS will depress economic growth and reduce in-state investment.

Source: Grover Norquist and Patrick Gleason, "States Show Folly of Energy Mandates," Politico, April 2, 2013.


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