The Truth About Your Electric Bill – By Joel Aaron

July 02, 2013

Earlier this week, over 2,300 AFP GA activists like yourself took action to tell our Public Service Commissioners to say “NO!” on a July 11 vote for renewable energy mandates in Georgia. [Take Action At]. Advocates of the new plan responded by saying “it’s not a vote for so-called `renewable portfolio standards’”, “it won’t raise energy rates”, and “it’s not a solar energy mandate”. Some have even expressed a distorted view of free markets by suggesting that Georgia Power, as a regulated monopoly (there are actually over 40 EMCs in Georgia) should be reined in by introducing yet more government regulation, government-favored and government subsidized energy alternatives. Unfortunately, many of these claims amount to word games and assertions that are not substantiated by the record of renewable energy mandates in several states.

True, the Georgia Public Service Commission is not currently calling it a vote for “renewable portfolio standards”. The term, itself, is like Kryptonite for many who are closely following the initiative toward green-energy-at-all-costs and its, often, disastrous record in states around the country. In reality, the proposal is exactly within the definition and practice of a “renewable portfolio standard” for Georgia. Todd Rehm points out at that according to the National Renewable Energy Laboratory, “A renewable portfolio standard (RPS) is a regulatory mandate to increase production of energy from renewable sources such as wind, solar, biomass and other alternatives to fossil and nuclear electric generation. It’s also known as a renewable electricity standard.”

Rehm continues, “The action by the PSC is a regulatory mandate by a government agency. No question about it. By mandating an additional 500 megawatts of solar energy in Georgia’s power mix, it fulfills the second part of the NREL definition.” So, essentially, it’s a renewable portfolio standard by another name. The distinction amounts to little more than word-smithing, a distinction without a difference.

The supporters of the upcoming vote for alternative energy mandates claim that it won’t raise energy rates (“upward pressure”), however, they have a difficult time substantiating that claim against the mounting evidence which suggests otherwise. Some media are questioning whether utility bills will really rise so high? According to the Institute for Energy Research, utility bills are 40% higher, on average, in states with a renewable energy standard than in states without one. While rates may not rise to this level overnight, starting down the slippery slope of approving renewable mandates will lead Georgia in this direction, as illustrated by states currently using a mandate. For example, 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 “upward pressure” on rates is, largely due, to the intermittent reliability of solar energy relative to more traditional sources like coal, natural gas and the re-emergence of nuclear. Renewable energy sources is more expensive to introduce than commonly advertised because, due to their intermittency, more backup power must be generated from fossil fuel plants to supplement it during peak hours. There is a statutory requirement that all electrical utilities provide reliable energy. In order to accomplish this, backup power generation is necessary to supplement solar requirements and energy costs, overall, begin to rise. The alternative to producing this backup power generation is the danger of increased blackouts and brownouts such as those seen under California’s energy mandates. And this from a region of the Country with quite a bit more available solar energy than we have here in Georgia.

While no renewable standard is currently on the docket for the July 11 meeting, Commissioner Bubba McDonald is widely expected to propose an amendment whereby Georgia Power customers are forced to pay to double the amount of solar production in Georgia, to the tune of a billion dollars. Commissioner McDonald’s proposal, by setting a minimum amount of solar in the state’s system, is by definition a renewable portfolio standard.

While a regulated monopoly such as Georgia Power is not the ideal free market scenario, using government to force the mandatory use of a heavily subsidized energy alternative, such as solar, is no more so a free market solution. It only serves to double down on government’s intrusion into the private sector in a way that hurts Georgia taxpayers and rate payers.

Joel Aaron is State Communications Director of Americans For Prosperity Georgia.

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