Ohio Senate Considers Alternative Power Mandate

Published January 1, 2008

The Ohio State Senate Energy and Public Works Committee is considering the pros and cons of a proposed alternative power mandate in the wake of recent hearings on the issue.

The renewable power industry claimed such a mandate would fight global warming while creating wealth and new jobs for Ohioans. Heartland Institute Senior Fellow James M. Taylor, managing editor of Environment & Climate News, presented data from many of the world’s leading economists demonstrating the mandate would be a mere symbolic gesture that would punish working families across the state.

Renewables More Expensive

Invited to testify at the October 23 hearing on Senate Bill 221, which would attempt to fight global warming by requiring Ohio consumers to purchase 25 percent of their electricity from alternative power sources, Taylor reported consumers pay 42 percent more for their electricity in states with renewable power mandates than in states without them.

Taylor also cited studies from many of the world’s leading economists and economic institutions finding global warming legislation similar to SB 221 would take a substantial toll on electricity prices, jobs, and consumers’ standard of living.

Taylor also presented data from the U.S. Energy Information Administration documenting Ohio has remarkably poor potential for the development of solar and wind power. The toll on Ohio residents of a renewable power mandate would therefore likely be even worse than indicated by the national studies Taylor presented.

Reliance on Science Criticized

Dismissing the studies cited by Taylor, state Sen. Lance Mason (D-Cleveland) asked if Taylor had read the only study that examined the economics of renewable power in an Ohio-specific context. When Taylor said he was unaware of such a study, Mason stated it contradicted all the studies Taylor cited and was more reliable because it was Ohio-specific.

A review of the economic literature after the hearings uncovered the Ohio-specific study Mason had asserted was more credible than those Taylor cited. It was written and conducted by the American Solar Energy Society.

Putting itself in the enviable position of determining whether its members should receive government subsidies and states should pass laws forcing consumers to purchase its members’ products, the American Solar Energy Society study predictably answered “yes.”

MIT vs. Solar Today

“Obscure, self-serving studies published by industry groups in their own professional trade journals often don’t make it to the forefront of my research efforts,” Taylor said in an interview for this article.

“A study reported in the trade journal Solar Today that the renewable energy industry employs X number of people and would employ even more if laws forced people to buy their products is less relevant to an objective examination of renewable power economics than studies conducted by the Congressional Budget Office, U.S. Energy Information Administration, and leading economics professors at MIT and Yale University,” Taylor continued.

Jobs-Killing Legislation

In his testimony, Taylor explained why renewable power mandates eliminate rather than create jobs.

“Assertions by activists and the renewable power industry that renewable power creates jobs are misleading at best,” Taylor stated. “True, if you mandate the construction of renewable power plants, you are creating jobs for people who build such plants. But you are at the same time taking away jobs from the people who build more cost-efficient conventional power plants.

“Moreover,” Taylor added, “by forcing consumers to pay more money for the same amount of power production, you are also taking away additional jobs that would have been created had consumers kept their money and spent it on goods and services they can no longer afford due to higher renewable power bills.

“Renewable power mandates create some jobs in the narrow sector of renewable power generation while eliminating a greater number of jobs in other sectors of the economy, sectors that would have enhanced the standard of living for the citizens of Ohio,” Taylor explained.

Taylor concluded, “Simple common sense tells us that if a product makes economic sense, you don’t have to subsidize it to make people produce it, and you don’t have to pass a law to force somebody to purchase it.

“The unavoidable reason why renewable and alternative power comprises such a small percentage of U.S. power generation is because it is significantly more expensive to produce than conventional power generation,” Taylor said. “If indeed it were otherwise, rather than coming here with their hats in their hands lobbying for government intervention, activist groups and the renewable power industry would raise their own money and go make a killing in the electricity production business.”

E. Jay Donovan ([email protected]) writes from Tampa, Florida.