Yesterday, I got my bill from Duke Energy Progress, or whatever it is this week. I sure was glad that by paying it I was helping out the beleaguered pig farmers of North Carolina.
That’s sarcasm, if you didn’t guess.
State law mandates that “renewable” energy sources provide a percentage of retail electric power generated by utilities. That includes mainly solar and wind power, but also other sources – including energy generated by pig waste.
Of course, you and I pay for it, because the extra cost of using alternative sources gets passed on in our power bills. That turns out to be a big hit on North Carolina.
The Heartland Institute reports: “A joint report by the John Locke Foundation and Beacon Hill Institute found the mandate would cost electricity ratepayers $1.845 billion between 2008 and 2021. By 2021, North Carolinians’ real disposable income will fall by $56.8 million and more than 3,500 jobs will be lost on net, even after accounting for any ‘green’ jobs the standard may have created.”
That’s because, like almost all government subsidies, the mandate shifts money from profitable (therefore efficient) uses to unprofitable (thus inefficient) ones. So, instead of adding jobs, government mandates and subsidies kill them. We hapless power customers will blow nearly $2 billion to siphon funding from wealth-producing enterprises to money-wasting boondoggles.
This puts the lie to the defense of this mandate that it creates jobs. In another sense, government mandates and subsidies never create jobs.
Defenders of the mandate say that without the law, solar companies and others would pull up stakes and leave. That makes the mandate corporate welfare – the transfer of public funds to companies that don’t support themselves with a viable product.
So the associated jobs aren’t productive work that creates wealth, but simply activity that taxpayers fund. That makes these “jobs” welfare — welfare with a work requirement, but welfare nonetheless. Making matters worse, these corporate welfare projects divert scarce resources that could be utilized more efficiently elsewhere.
A rejoinder is that solar and biofuel are becoming more cost efficient. But there’s a Catch-22 here. If these fuel sources are economically efficient, why do I have to subsidize them? If they are not efficient, well, why do I have to subsidize them?
More proof has arisen to show that alternative energy is unlikely to become cost-effective soon. Two bills to end that mandate have come up for consideration in the General Assembly: HB 298, Affordable and Reliable Energy Act and a Senate counterpart, SB 365. Both have faced heavy opposition, and their fate is unclear.
Here’s the kicker: the current versions would allow the mandate to continue into 2021 or later. But its opponents are frantically fighting against such a deadline, thus uncovering their real belief – which is that alternative sources of energy won’t be paying their own way eight years from now. Or longer. Or maybe ever
After all, why should big energy companies ever want to make renewable energy productive? The government gravy train keeps running as long as energy provided by the sun, windmills and pig waste isn’t profitable. So companies have no incentive to make alternative energy profitable and get off the government dole.
Finally, here’s more news the same day I got my bill: “The United States has double the amount of oil and three times the amount of natural gas than previously thought.”
The United States is awash with cheap, clean energy using proven technology. For us ratepayers to subsidize costly forms of energy is ridiculous. It is as if we insisted paying for heat in July – when during North Carolina summers we can get all the heat we could ever want just by opening the windows.
To sum up, we’re paying extra for sources of energy that cost too much, misallocate valuable resources, and aren’t needed. Here’s hoping the legislature can flip the off switch on this mandate before it costs us another billion or two.