Does your state have Renewable Electricity Mandates?

Twenty-nine States have passed legislation that requires utilities to sell or produce a certain percentage of electricity from renewable sources.   Electricity prices are higher in those states, partially due to these mandates.

According to the Institute for Energy Research these mandates are an expensive way to reduce carbon dioxide emissions.   In their posting The Status of Renewable Electricity Mandates in the States they note the following:

Some argue that renewable electricity mandates are a good way to reduce carbon dioxide emissions, but renewable electricity mandates are a very expensive way to reduce carbon dioxide emissions. According to the California Air Resources Board, it costs $133 per ton to reduce carbon emissions through the mechanism of a renewable electricity mandate. An internal Obama administration memorandum on subsidies for renewables recently noted that carbon dioxide emissions “would have to be valued at nearly $130 per ton for CO2 for the climate benefits to equal the subsidies.” To put these numbers in perspective, it currently costs about $15 a ton to purchase a certified carbon dioxide allowance traded on the European Climate Exchange.

There are currently no Federal renewable energy mandates. The Heritage Foundation has calculated the economic impact of enacting Fed mandates as follows:

Its researchers found that a mandate starting at 3 percent for 2012, and increasing by 1.5 percent per year until 2035, would:

• Raise electricity prices by 36 percent for households and 60 percent for industry;

• Cut national income (GDP) by $5.2 trillion between 2012 and 2035;

• Cut national income by $2,400 per year for a family of four;

• Reduce employment by more than 1,000,000 jobs; and

• Add more than $10,000 to a family of four’s share of the national debt by 2035.

Similarly, Credit Suisse estimated the capital expenditures necessary to achieve different levels of renewable generation by 2020. The bank noted that a nationwide 10 percent renewable electricity mandate would require capital expenditures of $350 billion, a 15 percent mandate would require $500 billion and a 20 percent requirement would require $750 billion. The California Air Resources Board has estimated that it will cost $115  billion in new infrastructure to meet California’s renewable electricity mandate in 2020 (33 percent).

I recommend that you open up this link to see how your State stacks up.

cbdakota