States Backing Away from Renewable Power Mandates

States Backing Away from Renewable Power Mandates
May 28, 2015

H. Sterling Burnett

H. Sterling Burnett, Ph.D. worked at the National Center for Policy Analysis for 18 years, most... (read full bio)

Marita Noon, executive director of Energy Makes America Great Inc., reports 2015 may go down in the books as the year support for renewable energy died. State and Federal legislators are adjusting their policies with regard to both electricity generation or transportation fuels.

Wind in Oklahoma

In the American Spectator (April 30), Noon notes the public, previously favorable towards renewable energy, is having second thoughts due to reliability problems and soaring energy costs. For instance, an October 2014 report in Oklahoma’s Enid News titled, “Wind worries?: A decade after welcoming wind farms, states reconsider,” said:

A decade ago, states offered wind-energy developers an open-armed embrace, envisioning a bright future for an industry that would offer cheap electricity, new jobs and steady income for large landowners, especially in rural areas with few other economic prospects. To ensure the opportunity didn’t slip away, lawmakers promised little or no regulation and generous tax breaks. But now that wind turbines stand tall across many parts of the nation’s windy heartland, some leaders in Oklahoma and other states fear their efforts succeeded too well, attracting an industry that gobbles up huge subsidies, draws frequent complaints and uses its powerful lobby to resist any reforms.

But it isn’t just wind energy that has fallen from favor, solar power and biofuels mandates and subsidies are also receiving a second look. And it isn't just Oklahoma reexaming its energy priorities -- other states and the federal government are as well. 

Renewables fall beyond OK

Nearly one a third of the 29 states and the District of Columbia that enacted renewable energy mandates, sometimes combined with subsidies, are reconsidering their commitment to renewable energy. In Oklahoma alone, approximately 30 bills relating to the wind industry have been filed in the state legislature in the 2015 session, including at least one targeting the tax breaks. On April 16, the Oklahoma house voted, 78-3, to eliminate the wind energy tax credit. The senate is reviewing a companion bill that is expected to pass and be signed by Republican Gov. Mary Fallin. 

Ohio was the first state to reconsider its renewable energy mandates. In June 2014, Gov. John Kasich signed legislation that paused the state’s RPS for two years. In early 2015, West Virginia became the first state to repeal its RPS. With unanimous support in the Senate and a 95-4 vote in the House. Following in their footsteps, in March, the Texas senate voted to end its RPS. It is expected to pass the House and be signed by Governor Greg Abbott.

Texas's termination of the RPS is expected to impact the solar industry as well. Charlie Hemmeline, executive director of the Texas Solar Power Association, states: “Increasing uncertainty for our industry raises the cost of doing business in the state.”

Kansas's governor worked out a compromise with House and Senate negotiators and the wind industry that would allow the state to end its renewable mandate, in exchange for not imposing a new tax on wind power producers. The wind industry feared the tax would hurt it more than the mandate helps it. North Carolina, and Michigan have legislation that revisits the states’ favorable renewable energy policies while New Mexico and Colorado each had bills to repeal or freeze the RPS passed in one chamber, only to stall, for the moment, in the other.

Taxpayer support for wind energy is also losing momentum in Congress, as evidenced by the fact that in March, Sen. Heidi Heitkamp (D-ND), failed to rally support behind an amendment that would have extended the wind-production tax credit for five-years. As it stands now, the wind-production tax credit lapsed at the end of 2014. 

Ethanol Support Wanes

Ethanol mandates, known as the Renewable Fuel Standard, are also losing their luster. Citing high costs, on January 16, 2015, Senators Dianne Feinstein (D-CA) and Pat Toomey (R-PA) introduced the “Corn Ethanol Mandate Elimination Act of 2015.”

Hawaii, which has its own unique ethanol mandate, is also reconsidering its support of the expensive, environmentally damaging fuel. KHON reports: “Nine years after a major change at the gas pump was forced on Hawaii drivers, many are now calling it a failed experiment and want it gone.”

In both the case of Hawaii and the federal government, lawmakers are looking toward advanced biofuels that don’t raise food costs. However, the Environmental Protection Agency—tasked with implementing the RFS—has repeatedly waived or reduced the cellulosic biofuel requirements because, despite more than $126 billion invested since 2003, the industry has yet to produce commercially viable quantities of fuel. 

Noon concludes her article with a reference to a report by Watchdog.org, “Why repealing the renewable energy mandates is good for the economy,” which determined “The best policy for the states is to leave energy consumption decisions to consumers in the market rather than legislate them.”

This is a modified version of earlier article found at http://spectator.org/articles/62566/cancel-our-renewables

H. Sterling Burnett, Ph.D., (hsburnett@heartland.org) is the managing editor of Environment & Climate News.

H. Sterling Burnett

H. Sterling Burnett, Ph.D. worked at the National Center for Policy Analysis for 18 years, most... (read full bio)