Arkansas Legislature Rejects Renewable Power Mandate

Published April 4, 2013

The Arkansas legislature rejected a proposed renewable power mandate when House Bill 1390, the Arkansas Distributed Generation Act, failed to make it out of a joint committee on energy on April 3.

With former U.S. Central Intelligence Agency Director James Woolsey and former Colorado Gov. Mark Ritter scheduled to testify in favor of the bill, renewable power advocates expressed optimism about its chances. After testimony from supporters and opponents, however, the bill was stopped when none of the committee members seconded a motion to vote on the bill.

Rep. Warwick Sabin (D-Little Rock) presented HB 1390, which would require Arkansas utilities to enter into distributed generation contracts for 1,200 megawatts of renewable power, equal to approximately 5 percent of the state’s electricity consumption. Distributed generation contracts require utilities to purchase power from numerous small providers, such as the owners of rooftop solar panels or backyard windmills.

Woolsey, Ritter Back Out
HB 1390 appeared to have important momentum when reports surfaced that Woolsey and Ritter confirmed to Sabin they would testify in favor of the bill and made travel arrangements to Little Rock for that purpose. After HB 1390 opponents confirmed James Taylor, senior fellow for The Heartland Institute, which publishes Environment & Climate News, would testify against the bill, Woolsey and Ritter backed out on their plans.

The expected clash between Woolsey and Ritter on one side of the bill and Taylor on the other generated substantial media interest. The cable television network Showtime sent a film crew to Little Rock to film the debate between them. Ultimately, the crew left Little Rock with footage of only Taylor, which it plans to air in a fall 2013 series on the energy and climate debate.

Supporters Claim Economic Benefits
After Sabin presented the bill to the House-Senate Joint Energy Committee, Bill Ball, owner of the Little Rock-based solar power company Stellar Sun and founder of the Arkansas Renewable Energy Association, testified in support of the bill. Ball claimed the bill represented merely a small step toward affordable renewable energy and would not raise electricity costs.

He said the proposed mandates are necessary to boost the state’s job market because renewable energy companies have already begun packing up and leaving because state laws and the state business climate are “not conducive” to renewable energy companies.

Ball also claimed the proposed mandates are consistent with free market energy principles and said “special interest groups” were leading the charge to oppose the mandates.

“We don’t want a subsidy, just a chance” to compete in a free market, Ball asserted.

Three other HB1390 supporters joined Ball in testifying in favor of the bill. These were Frank Kelly, owner of Little-Rock based Solar Source Consulting; Ted Ko, associate executive director of the California-based Clean Coalition; and Terry Tremwel, principal of Arkansas-based Ozark Green Energy.

Real-World Economic Costs
Taylor rebutted the testimony of Ball and the other HB 1390 proponents.

Observing that energy costs are a key factor encouraging or stifling economic growth, Taylor presented economic data showing renewable power is substantially more expensive than conventional power. Taylor also presented U.S. Energy Information Administration (EIA) projections indicating renewable power will be substantially more expensive than conventional power for at least the next several decades.

“Rising electricity costs have the same negative economic consequences as rising taxes. As electricity costs rise, people have less money to spend throughout the economy on items such as nutrition, housing, and durable consumer goods,” Taylor explained.

“Rising electricity costs are worse than rising taxes in one important particular,” Taylor added. “When government takes more tax money from people, there is at least the possibility that people will receive goods and services from government in exchange for those additional tax dollars. When electricity prices rise, however, people lose money but receive no additional goods or services in return.”

Expecting Ritter to testify that Colorado’s renewable power mandates are providing affordable energy in Ritter’s home state, Taylor presented EIA data showing Colorado electricity prices are rising more than twice as rapidly as U.S. and Arkansas electricity prices.

“These rising electricity costs have substantial real-world impacts,” said Taylor. “Averaged out over the state’s 1.9 million households, if Coloradoans paid the same price for electricity as their neighbors in Wyoming pay, each Colorado household would save $600 every year in electricity costs.”

Contradictory Renewable Power Claims
Taylor concluded his testimony by noting feed-in tariffs play a central role in HB 1390. He reported renewable power industry lobbyists testified just two weeks earlier in an Ohio Senate committee that feed-in tariffs were a primary culprit in rising electricity prices and resultant job destruction from renewable power mandates in several European nations and U.S. states.

“Just two weeks ago, the renewable power industry’s own lobbyists acknowledged in testimony to the Ohio Senate Public Utilities Committee that feed-in tariffs are economically destructive. They emphasized in their testimony that Ohio’s renewable power mandates would not bring such economic destruction to Ohio because the Ohio law did not include a feed-in tariff,” said Taylor.

“I pointed out to the Ohio Senate Committee that when I have participated in legislative hearings in other states and in public forums throughout the nation, these same renewable power advocates have consistently pushed for feed-in tariffs,” said Taylor. “They responded, and I quote, ‘We have learned from our past mistakes.'”

“I told them I was surprised yet happy to hear them acknowledge the negative economic consequences of feed-in tariffs and I would hold them to their testimony in other states. Now, just two weeks later, renewable power advocates seek to impose feed-in tariffs here in Arkansas,” said Taylor.

After the testimony concluded, Joint Committee Co-Chair Sen. Linda Chesterfield (D-Little Rock) presented a motion to vote on the bill. No committee member seconded the motion, and the bill failed.

Alyssa Carducci ([email protected]) writes from Tampa, Florida.