MEMORANDUM

______________________________________________________________
DATE: TO: CC: June 17, 2010 Sen. Mary Jo White, Sen. Ray Musto, Rep. Bud George, Rep. Scott Hutchinson Sen. Ted Erickson, Sen, Jane Orie, Sen Mike Waugh, Sen. Jane Earll, Sen. John Pippy, Sen. Lisa Boscola, Sen. John Rafferty, Rep. Eugene DePasquale, Rep. Greg Vitali, Jim Cawley, PUC Chair Nathan Benefield, Director of Policy Research Missing AEPS Report ______________________________________________________________

FROM: RE:

I am writing concerning recent news that the Pennsylvania Utilities Commission has failed to produce an annual report on Pennsylvania’s Alternative Energy Portfolio Standards (AEPS), and has not produced such a report since May 2008 (see story from Pennsylvania Independent). As I’m sure you are aware. Act 213 of 2004, which established the AEPS, mandates the PUC to: [P]rovide for, at least annually, a review of the alternative energy market within this Commonwealth and the service territories of the regional transmission organizations that manage the transmission system in any part of this Commonwealth [emphasis added]. This is troubling both because the PUC appears to be in violation of their charge, and because legislation is moving to increase the Alternative Energy Portfolio Standards, and without adequate and up-to-date information on the effects of the 2004 law. This report should be released and studied before consideration of any mandates to artificially increase the AEPS. We should not be designing Pennsylvania’s future energy market while lawmakers, and more importantly the public, cannot get basic information about the current energy market. The 2008 PUC report states: "There should be no changes or improvements to the program at this time", following estimates that per kWh cost of solar is over 700%, and wind 23%, more expensive than the cost of coal. New mandates under HB 2405 would represent a 400% increase in alternative energy production, and a whopping 1,700% increase in solar electricity, from the latest PUC data. Moreover, instead of relying on data on the effects of the AEPS, advocates of higher alternative energy mandates, and seemingly even the PUC, cite a study done by Black & Veatch touting “green job” creating, which was paid for by foundations which have long supported alternative energy mandates. Yet this analysis is based on faulty assumptions and fails to look at the other side of the ledger—presuming both federal legislation to make traditional energy sources more expensive (and alternative sources more competitive) and perpetual state and federal subsidies for alternative energy. We recently offered testimony on the fallacy of “green jobs” policies like alternative energy mandates, you can find this online at CommonwealthFoundation.org/GreenJobs.

225 State Street, Suite 302 | Harrisburg, PA 17101 | 717.671.1901 phone | 717.671.1905 fax | CommonwealthFoundation.org

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