Union of Concerned Scientists
By Jeff Deyette
Having failed completely in its attempt to repeal state renewable electricity standards (RES) during the spring 2013 legislative season, the American Legislative Exchange Council (ALEC) is shifting gears. Their new strategy is more nuanced, but the goal remains the same: support their fossil fuel cronies by rolling back renewable energy policies. Fortunately, this latest scheme is likely doomed to fail as well.
This week, ALEC will host its annual meeting in Chicago, during which the group—who provides powerful corporations with behind-closed-doors access to legislators for the purpose of drafting ‘model legislation’ that serves their interests—will discuss the next phase of its ongoing effort to dismantle state renewable energy policies across the country. But first, ALEC leaders will likely have to explain their failures to their fossil fuel industry funders, including Koch Industries, Exxon-Mobil and Peabody Energy.
Just last year, ALEC made it very public that repealing state RES policies would be a legislative priority in 2013, doubling down on its recent efforts to roll back these standards. ALEC adopted model legislation, written by climate skeptics at the Heartland Institute and innocuously dubbed the “Electricity Freedom Act”, which had the sole purpose of repealing state RES policies. Along with the Heartland Institute and a host of fossil fuel-funded cohorts, ALEC launched a disinformation campaign targeting several state RES policies, including high-profile attacks in Kansas and North Carolina.
The good news is that ALEC’s efforts completely failed: not a single state RES was repealed. Instead, 14 new pro-renewable energy bills became law nationwide, including stronger RES targets in Colorado, Minnesota and Nevada.
How did ALEC misfire so badly? It appears they underestimated the depth of support for RES policies from both the general public and a diverse coalition of businesses, farmers, community and faith leaders, public health and environmental advocates, and policy makers of all political stripes. That popular and bipartisan support stems largely from the policy’s successful track record.
State-level renewable electricity standards, which require electric utilities to gradually increase the amount of renewable energy in their power supplies, are a leading driver of renewable energy development in the U.S. today. Twenty-nine states and the District of Columbia have these market-based policies, 17 of which have set targets of 20 percent or greater.
Contrary to misleading claims by ALEC, a recent UCS review of state RES policies shows that utilities are successfully meeting their renewable energy requirements with little or no additional cost to consumers, while supporting rapidly growing renewable energy industries that provide jobs and bring investments, tax revenues and other substantial economic benefits to local communities. In other words, the facts on the ground about the success and effectiveness of renewable energy policies are carrying far more weight with legislators than the fiction that ALEC and its allies have been peddling.
With last year’s strategy falling flat, ALEC now appears to be moving toward a more subtle scheme. According to one recent report, members of the group’s Energy, Environment and Agriculture Task Force will consider adopting new model legislation, called the Market-Power Renewables Act. Rather than an outright repeal approach, this model legislation essentially seeks to “phase out” state RES policies by counting voluntary purchases of renewable energy made by homeowners, businesses and other institutions toward a utility’s declining annual renewable energy requirements.
It’s a clever approach because it allows ALEC members to be “for” renewable energy (e.g., the voluntary market), while actually serving to slash utility requirements to shift toward cleaner, more sustainable power sources. But it too will likely falter.
The voluntary and compliance (e.g., RES) markets for renewable energy have effectively co-existed since 1997. Both are important drivers of new development and each has strengths that complement the other.
The compliance market offers long-term certainty to developers, which spurs investment and helps bring down technology costs. The RES serves as a floor, or minimum requirement for renewable energy, and ensures that all consumers share in the cost to bring the economic development, public health, climate, price stability and energy security benefits that they provide.
The voluntary market provides the opportunity for energy consumers of any size to go above and beyond what the compliance market requires. It is well established and thriving, with some of the nation’s largest corporations—including Intel, Microsoft, Whole Foods, Walmart and Staples—investing millions of dollars to be leaders in clean energy.
By allowing utilities to double count voluntary purchases toward their RES requirements, ALEC’s model legislation would shift the costs of RES compliance disproportionately away from all ratepayers and onto those voluntary market participants. What incentive then would a Walmart or Microsoft or even individual homeowners have to continue making voluntary purchases? ALEC’s Market-Power Renewables Act would therefore undermine both the voluntary and compliance markets, likely adding a whole set of new and powerful voices to the already strong coalition that has formed to oppose its anti-renewable energy legislative agenda.
What’s more, ALEC’s “new” proposal has actually been a bad idea for at least 14 years. Way back in 1999, the National Association of Attorneys General established Green Marketing Guidelines, which argued that the double counting of renewable energy credits (used to track purchases in both the voluntary and compliance markets) are deceptive and not acceptable. More recently, the Federal Trade Commission issued Green Guidelines that came to a similar conclusion.
It is likely that ALEC’s Energy, Environment and Agriculture Task Force members will ignore these obstacles, and instead move full steam ahead with endorsing the new model legislation. That’s unfortunate, because the real-world evidence about the success of the RES and the benefits of transitioning to a clean energy economy is clear. With any luck though, the Market-Power Renewables Act will end up in the trash can right next to the failed Electricity Freedom Act.
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