1Center or American Progress | Renewable Energy Standards Deliver Aordable, Clean Power
Renewable Energy StandardsDeliver Affordable, Clean Power
Right-Wing Attacks on These Standards Are Misguided
Richard W. Caperton April 11, 2012
Introduction
New Jersey, exas, and Caliornia have very dieren energy proles. Tey use dierenypes o energy o power heir economy. Tey have dieren ypes o uiliy sysems. And hey have dieren expecaions o heir energy sysem.Bu hese saes share one imporan rai: Tey’re reaping he benes o renewableenergy. New Jerseyans are rs-hand winesses o how solar power creaes new busi-nesses and new jobs.
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exans can hank wind power or keeping he lighs on duringexreme weaher ha sruck he sae in early 2011.
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And Caliornians are using renew-able energy o mee heir sae’s new greenhouse gas polluion reducion sandards.
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weny-six oher saes also have renewable energy sandards, which require a cerainamoun o he elecriciy sold wihin a sae o come rom renewable energy. Tese poli-cies lead o cleaner air, economic developmen, and a more resilien elecrical grid.Despie hese acs, hough, renewable energy sandards have come under atack. A small bu vocal group o righ-wing aciviss and ossil-uel advocaes claim ha hesepolicies are raising elecriciy prices or consumers, which in urn is holding back saeeconomies.
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As conservaive lobbyis Grover Norquis wroe in a recen
Politico
op-ed:
Renewable energy standards, by design, are intended to drive up energy costs—requir-ing utilities to use more expensive and oen less reliable sources o energy. Not surpris-ingly, such laws have hit ratepayers hard. States that have a binding [renewable energystandard] now have electricity costs that are 39 percent higher than states that don’t have a binding [standard].
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2Center or American Progress | Renewable Energy Standards Deliver Aordable, Clean Power
And Rober Bryce o he conservaive Manhatan Insiue adds:
Tere is growing evidence that the costs may be too high—that the price tag or pur-chasing renewable energy, and or building new transmission lines to deliver it, may not only outweigh any environmental benefts but may also be detrimental to the economy,costing jobs rather than adding them.
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Forunaely or consumers in he 29 saes wih renewable energy sandards, hese criics are wrong. Tere are no daa showing ha hese sandards cause elecriciy raes o skyrocke.Tis issue brie will describe he hisory o renewable energy sandards, explain how elec-riciy raes are deermined, and presen evidence showing ha hese sandards have nocaused elecriciy prices o rise. Tis inormaion ses he sage or moving orward in wocriical ways: srenghening sae-level renewable energy sandards so consumers can seeeven greaer benes rom renewable energy, and passing a similar policy a he ederal level.
Renewable energy standards are commonsense policies with bipartisansupport and economic benefits
A he mos basic level, every renewable energy sandard is he same: Tey require uili-ies o sell a cerain amoun o energy generaed rom renewable sources like wind, solar,geohermal, and biomass, among ohers. Beyond ha, he deails can vary: Saes canallow dieren echnologies, such as hydropower or landll gas; hey can eiher allow elecriciy generaion rom ou o sae or resric i o only in-sae generaion; and hey can eiher cover all uiliies or exemp cerain uiliies rom he policy. When sae policymakers implemened hese sandards hey craed hem o mee heneeds o heir sae in a commonsense way. Conrary o naysayers’ claims, hese areno radical policies. In ac, here’s a long hisory o biparisan suppor or renewableenergy sandards. Tese policies were signed ino law by ormer Republican gover-nors like George W. Bush (exas), Chrisie odd Whiman (New Jersey), and imPawleny (Minnesoa), as well as ormer Democraic governors like Jennier Granholm(Michigan), Jane Napoliano (Arizona), and Gray Davis (Caliornia).Tere are many reasons why a sae would wan a renewable energy sandard:
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Using renewable energy insead o ossil uels has many public healh benes, such asreducing he harmul air polluion ha causes ashma.
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Tese sandards creae opporuniies or new businesses, which can build renewableenergy projecs.
3Center or American Progress | Renewable Energy Standards Deliver Aordable, Clean Power
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Tese sandards can drive down he cos o specic echnologies hrough he “learn-ing by doing” process, in which echnologies like solar panels ge cheaper as we gainmore experience making hem.Tere are also some very imporan—and oen ignored—reasons why hese sandardscan posiively impac elecriciy raes. Te Union o Concerned Scieniss has documenedhow shiing elecriciy generaion rom naural gas o renewables causes naural gas priceso go down, making he remaining naural gas generaion cheaper han i was beore.
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Renewable energy sandards also ensure resource diversiy. In ac, some saes callheir renewable energy sandard a “renewable porolio sandard” o emphasize harenewables are a valuable par o a diverse porolio o energy resources. Such a diverseporolio reduces exposure o any single energy source, reducing risk o consumers.Finally, renewable energy sandards play especially imporan roles in saes ha resruc-ured heir elecriciy markes. Saring in he 1990s some saes moved away romradiional monopoly uiliies and oward so-called “deregulaed” markes.In he radiional srucure, uiliies submi plans o sae regulaors abou heir generaionmix. Regulaors have he abiliy o make uiliies accoun or hings like how a uure priceon carbon will impac consumers i a uiliy builds a coal-red power plan, or how nauralgas price spikes could impac consumers i a uiliy builds a naural gas power plan.Bu in a resrucured marke regulaed uiliies no longer own power plans and regulaorsdon’ approve heir resource plans. Insead, uiliies buy power rom independenly ownedand operaed power plans. Tese power-plan owners (commonly called “merchan gen-eraors”) have no obligaion o provide a diverse mix o elecriciy. In hese saes a renew-able energy sandard is he only way o ensure resource diversiy. Tis is no small issue:Every single sae wih a resrucured uiliy indusry has a renewable energy sandard.
Electricity prices are influenced by dozens of factors
Beore explaining how renewable energy sandards impac elecriciy raes, i’s worhgiving a litle bi o background on how he raes are deermined.ypically, a sae public uiliy commission approves a uiliy’s raes. Trough a monhs-long process, he commission looks a uiliy daa and deermines how much i shouldcos he uiliy o provide reliable service o all o is cusomers. Tis includes a reason-able pro, so ha he uiliy is incenivized o deliver qualiy elecrical service. Ten hecommission projecs how much elecriciy he uiliy will sell and divides he amoun o money required o provide service by he amoun o energy sold o come up wih a rae,ypically expressed as cens per kilowat-hour.
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Renewable Energy Standards Deliver Affordable, Clean Power
Richard W. Caperton looks at the history of these standards and explains why they don't make electricity prices rise.
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