The RI Center for Freedom & Prosperity has occasionally weighed in over the years on the energy and related regulatory issues facing Rhode Island, finding that “green” policies cost Rhode Islanders both their wealth and their jobs. Already suffering from one of the worst business climates and Jobs & Opportunity Index (JOI) ratings in the nation, Ocean State families and businesses cannot afford further increases in energy costs or losses in job opportunities.
Click here for the full RI report.
Yet, as the list of legislation at the end of this document shows, Rhode Island lawmakers are poised to make a deteriorated situation even worse.
Existing renewable portfolio energy standards (RPS), combined with an aggressive 2016 energy policy, will take even more taxpayer and ratepayer dollars out of the general economy in order to fund a special interest climate agenda and result in higher energy costs and a negative drag on the state’s economy. As this document shows, the harm done by these costs will all be in the name of a very low-impact, inefficient policy.
Based on this study’s findings, the Center strongly recommends that lawmakers reject all proposed new energy mandates in 2016 and, instead, repeal those that are currently written into law.
Because of its high dependence on electricity generation via natural gas production (98% of in-state generation), Rhode Island can boast a relatively low carbon footprint. However, to increase its renewable energy portfolio from its current level to its RPS-mandated target of 14.5% by 2019, for only a slight improvement, a massive influx of taxpayer and ratepayer dollars will be required, leading to higher electricity prices and a net loss of jobs.
Rhode Island, despite its ocean proximity, is rated as having a low capacity utilization factor for wind and solar. This means it could be very difficult — and costly — to reach its 14.5% target over the next three years.
Exacerbating this condition, “renewable” energy is considerably more expensive to produce than “fossil fuel” energy, meaning that an increase in the renewable portion of the state’s energy portfolio necessarily means an increase in electricity costs. Rhode Islanders are well aware of this phenomenon with the controversial Deepwater Wind project, which alone is expected to cost ratepayers upwards of $440 million dollars over its first 20 years.
Overall, the high cost of complying with existing state RPS mandates, combined with the low benefit of a minor reduction of our carbon footprint, should lead reasonable lawmakers to conclude that this so-called “investment” does not present a good value for Rhode Island.
Because of this poor cost-benefit “value proposition,” up to five times less than the Environmental Protection Agency (EPA)–suggested standard, Rhode Island should reconsider its existing energy policy approach. Given its highly unfavorable return on investment, the money targeted to meet its RPS goals could be better spent on sorely needed broad-based tax cuts that would benefit every Rhode Islander and actually spur economic growth.
By the numbers, national research by Dr. Timothy Considine comparing projects to a base case without energy mandates finds that if existing RPS capacity targets are to be met, Rhode Island will experience:
- 4,401–6,068 lower employment levels, despite the few hundred energy jobs created
- $141–190 million per year in total costs required to raise renewable production to targets through 2040
- 49–73% as the range for the sustained increase in the cost of electricity from new solar and wind capacities
- 13–18% as the sustained increase in actual electricity rates expected to be passed on
- $670–893 million per year extracted from the economy in the form higher electricity rate payments by private sector businesses and families, with the “services” and “construction” industry sectors shouldering the largest burdens
- $134–205 per ton as the projected cost of carbon dioxide emission reductions for Rhode Island, well beyond the $40–60 cost standard that the EPA itself recommends
The high costs of achieving small carbon dioxide emission reductions using RPS in Rhode Island prove that it is an inefficient means to address global climate change and represents a poor investment for state taxpayers and ratepayers. As in many other states, the costs of carbon reduction in the Ocean State are significantly higher than EPA standards, while the small stimulus from RPS investment is not large enough to offset the negative effects of higher electricity prices.
Click here for the full RI report.