Study: Montana’s Renewable Power Mandate Is Costly, Ineffective

Published February 7, 2011

As the Montana legislature considers repealing the state’s Renewable Portfolio Standard (RPS), a new study by the American Tradition Institute and the Montana Policy Institute concludes the state’s alternative energy mandates will be costly to citizens.

Little or No Emissions Decline
The study, prepared for the American Tradition Institute by economists at the Beacon Hill Institute at Suffolk University, found Montanans will likely pay $225 million more for power in 2015 because of the state’s RPS.

In addition, the mandate will bring few environmental benefits, as it is unclear whether the use of renewable power sources such as wind and solar actually reduces overall greenhouse gas emissions. Wind and solar power require significant fossil fuel-based backup power to accommodate variability in the availability of wind and sunlight for power conversion. A recent study published by the Bentek energy market analytics company found wind power can actually increase pollution and greenhouse gas emissions because the constant ramping up and ramping down of fossil-fuel backup systems is less efficient than running them at a steady pace.

Harsh Economic Penalties
The study also reported:

• Over the period of 2010 to 2015, renewable power mandates will cost Montanans an additional $1.865 billion over conventional power, within a range between $1.102 billion and  $2.886 billion.

• Montana’s electricity prices will increase by an average of 1.33 cents per kilowatt hour (kWh), or 18 percent, by 015, within a range between $0.83 cents per kWh (11 percent) and 2.06 cents per kWh (28 percent).

• By 2015 Montana will lose an average of 1,874 jobs, within a range between 1,172 jobs and 2,893 jobs.

• By 2015, the renewable power mandate will reduce annual wages by an average of $520 per worker versus baseline projections, within a range between $325 per worker $803 per worker.

• Higher home energy costs will cause annual real disposable income in 2015 to fall by $175 million, within a range between $109 million and $270 million.

Wasted Opportunity
“Montana could be at the forefront of energy innovation and in reducing our dependence on foreign energy sources.” said Carl Graham, CEO of the Montana Policy Institute. “Instead, we’re subsidizing flavor-of-the-day industries and exporting our jobs to places that care much less about the environment than we do.

“Montana lawmakers should consider these facts as they weigh our economic and energy future,” Graham explained.

More Studies to Come
The American Tradition Institute and the Beacon Hill Institute will soon be releasing studies of the economic impacts of renewable power mandates on additional states. The April issue of Environment & Climate News will feature economic impacts in Colorado.

Paul Chesser ([email protected]) is executive director of the American Tradition Institute. This article was first published on the American Tradition Institute Web site (, and is reprinted with permission.

For More Information:

The Economic Impact of Montana’s Renewable Portfolio Standard:

Wind, Coal and Gas in Colorado: How Less Became More… Wind, power and unintended Consequences in the Colorado Energy Market: