Category — State Energy Regulation

“Ultimately, New York’s RPS will cost ratepayers billions of dollars to support the construction of new generation. And if the state continues to rely on wind as the dominate resource, more turbines will be necessary to make up for low capacity factors. The program is up for review again in 2013. It’s time for the PSC to remove the rose-colored glasses and acknowledge the program for what it is: Regulatory Capture at its finest.“

Tens of thousands of acres across New York State have been transformed into sprawling electric generating facilities. Specifically, some 18 industrial wind complexes house nearly 1,000 towering wind turbines that consume the landscape and threaten otherwise pristine communities.

Now, consider that another 1,500 giant towers will need to be erected by 2015 in order to satisfy the state’s 30% renewable energy mandate.

New York’s Renewable Portfolio Standard (RPS) can be credited with most of the wind development in the state. Officials insist the policy has helped New York diversify its energy resources and will ultimately lower electricity prices but such claims are more rhetoric than real.

New York’s RPS has already exceeded original budget projections, it’s current renewable targets are unrealistic, and claims that prices will drop are predicated on a flawed understanding of how the New York wholesale power market operates.

Background

New York first enacted its renewable energy mandate in 2004 through regulations adopted by the Public Service Commission (PSC). At the time, about 19.3% percent of electricity retailed in the state was derived from renewable resources, with the vast majority coming from large-scale hydroelectric facilities upstate and in Canada. The PSC ordered the state reach a 25% renewables target by 2013 which meant an incremental increase of 10.0 million megawatt hours (MWh) from projects built after 2003. [Read more →]

“Local environmental regulators say they will press ahead in their battle against global warming whether or not Congress strips U.S. EPA of its authority to regulate greenhouse gasses. State and local officials from New York and New Jersey also predicted that new greenhouse gas-curbing rules regulating industries would continue even if Congress approves federal climate legislation.”

- Nathanial Gronewold, “States Refuse to Back Down on Climate Policy,” E&E News, May 24, 2010 (reprinted below).

Affordable energy is under assault at all levels of government. But while much attention has focused on federal efforts that are certain to increase the cost of energy (e.g. Waxman-Markey, Kerry-Graham-Lieberman) far less scrutiny been paid to the concerted efforts at the state level to achieve similar goals. The Institute for Energy Research’s report Energy Regulations in the States: A Wake-up Call fills the void and highlights the programs anti-energy activists are promoting in the states.

The report is available here and an interactive map showing electricity prices and other select economic and energy data is here.

The report includes:

• A detailed look at greenhouse gas (GHG) regulations in the states. There have been total of 249 bills passed (see below) that regulate GHGs nationwide, leading to higher energy prices in states.

• An examination of the three regional greenhouse gas initiatives and their effect on state energy policy. A majority of the nation’s states are either members or observers in one or more of these initiatives, and they have varying effects of energy policy.
• A look at the de facto bans on coal power plants that are popping up in different parts of the nations, and the impact these have on the price of energy and doing business in these states.
• An analysis of Renewable Portfolio Standards throughout the nation. These mandates require a certain percentages of the state’s overall electricity to come from renewables. States that have binding renewable electricity mandates, have electricity prices that are an average of 40 percent higher than other states.
• A break down of the electricity generation profile in each state (this map provides an easy-to-use view of this breakdown). The report also explains why promoting nuclear and wind will do nothing to reduce oil imports (petroleum provides only one percent of our electricity generation).
• An examination of the reasons electricity prices are lower in some states than in others. For example, 13 of the 15 states with the least expensive residential electricity prices produce at least 50 percent of their electricity from either coal or hydroelectric power.
• A detailed state specific appendix examining the energy sources, prices, and regulation (scroll down here to view the link for each states) These profiles give the varying prices of energy per state, as well delve into the wide spectrum of energy sources utilized by our nation. They describe both the benefits and impediments that different sources face in each state and the programs that make up policy. [Read more →]