Renewable Fuel Mandates Drive Up Cost of Electricity


States that impose renewable fuel mandates on electric utilities cause consumers in those states to pay upwards of thirty percent more for electricity than consumers in states without the mandates. Worse yet, we’re all subsidizing renewable fuels like wind and solar with our tax dollars.

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A 2012 study by the Manhattan Institute compares states with renewable mandates to those that allow utilities to purchase the cheapest electricity available. The states with mandates paid 31.9% more for electricity than states without them. According to the U.S. Energy Information Administration, residents of North Dakota, a state without a mandate, pay 7.63 cents per kilowatt hour for electricity. Neighboring Minnesota pays 10.76 cents.

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Minnesota’s politicians could bring relief to rural residents, because the 2007 law stipulates that the rules can be eased if economic conditions aren’t favorable. But no one wants to take on the not-so-jolly giant green lobby. The state’s Division of Natural Resources is in denial, arguing that “compliance is generally cost effective for the utilities” subject to the mandate.

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With natural gas prices not far from $2 per million BTU, the competitiveness of wind power is highly suspect. If Congress allows a tax subsidy for renewables to expire this year, as it should for the sake of taxpayers, even the wind lobby in Washington admits that many turbine farms will be bankrupt.

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Read the whole thing.

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Update: Doug Ross linked – thanks!

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