The most liberal leaning states, with policies designed
to curtail conventional power plants, have electric rates over twice as
high as the most conservative leaning states. For example, a voter in
Connecticut using the same amount of electric power as a voter in Utah
would pay $800 a year in higher electric bills. It also means high power
cost states will be passed over in a manufacturing revival bringing
good middle class jobs back to U.S. shores.
States on the Pacific and the Northeast coastal tend to
have policies that raise electric rates. The phased in nature of many
of these policies ensures the difference in electric rates by state will
continue to grow by as much as 20% in the years to come. Although most
states, Republican and Democrat leaning have renewable energy standards,
liberal leaning states have more aggressive requirements for expensive
renewable power sources like wind and solar, which have been receiving
government subsidies for years yet still cannot compete in the free
market economy with other forms of energy like coal and natural gas.
Liberal-leaning states and counties are often slow to
cite, and allow for, new conventional power plants. Many of these states
have an unfriendly regulatory environment for conventional power
plants. Some of these localities have economy-slowing carbon taxes,
ranging from $5 per ton of CO2 produced in Montgomery County, Maryland,
to carbon taxes on residents, businesses, and industrial customers in
Boulder, Colorado. Last November residents in Boulder County voted to
keep their carbon taxes where they are, which range from $21 to
residents to nearly $10,000 for industrial customers.
The eleven highest cost states cluster between about
$35 and $50 per million BTU’s (energy needed to heat one pound of water
by one degree Fahrenheit) and average 61% higher at $40/Million BTU. In
addition to the policies described above, these liberal state
governments believed they could punish power plant operators by
de-regulating prices for the electric generation portion of electric
bills. Previously power plant prices were regulated by government run
Public Service Commissions to protect the massive infrastructure
investments required to disburse electric power to everyone while
protecting against monopoly pricing. Price de-regulation was a trendy
issue in the late 1990’s that supposedly would force utilities to
compete and lower prices but really just gave the power plants, with
essentially captive customers, the opportunity to raise prices.
Bottom line: Citizens should oppose energy policies
which drive up the cost particularly for the middle and working class,
such as carbon taxes, subsidies to "green" companies, and instead should
push state and Federal legislators to allow more natural gas
development and more conventional power plants. If renewable energy is
meant to be, the free-enterprise system will let the best ideas succeed
and get rid of the government cronyism.
David T. Stevenson, Director
Center for Energy Competitiveness
Caesar Rodney Institute
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