Taxpayers Asked to Subsidize Renewable Boondoggle

Published October 1, 2006

U.S. Sen. Harry Reid (D-NV) and Rep. Tim Matheson (D-CO) have proposed legislation requiring federal taxpayers to subsidize $300 million in renewable energy equipment purchases in six western states.

The bill aims to induce schools in the affected states to purchase expensive renewable energy equipment by making federal taxpayers pick up the tab.

Regular Power Better Value

The proposed legislation, the Renewable Schools Energy Act of 2006, would subsidize renewable energy equipment in Arizona, Colorado, Idaho, Montana, Nevada, and Utah. Currently, schools in those states usually choose to purchase electricity from conventional power sources, which is significantly less expensive than electricity generated from renewable sources.

Under the terms of the bill, $300 million in interest-free bonds would be offered to schools in the six states to purchase renewable energy equipment. The schools would not have to make any payments on the bonds for 20 years but would have to pay them off in full at that time.

Environmental activists have long championed renewable energy but have had little success convincing private citizens to voluntarily pay more money for renewable power. Power companies that offer consumers the option of paying more money for renewable power report participation rates of about 1 percent.

The Reid-Matheson legislation aims to overcome such opposition by framing the expensive subsidy as a benefit to education.

Sponsors Tout Education

“Schools are vulnerable to the skyrocketing costs of energy. When their energy budgets take a hit, kids’ education suffers,” said Matheson. “This legislation will help public school districts save money, increase educational opportunities, and take advantage of advances in renewable energy technology.”

“I am proud of this legislation because it will save Nevada schools money and promote renewable energy,” said Reid. “Every dollar saved on utilities is a dollar that could be used to get every Nevada student the best education possible.”

Motives Questioned

Because renewable energy is so much more expensive than power generated from traditional sources, analysts suggest that if Reid and Matheson are truly concerned first and foremost about education, they would be more effective by simply giving schools $300 million in grants rather than making them spend it on renewable energy equipment that cannot financially compete against conventional power sources.

“This proposed legislation is nothing more than powerful legislators looking for a means to bring home the pork,” said Sterling Burnett, a senior fellow at the National Center for Policy Analysis.

“Tying this boondoggle to the feel-good issue of ‘helping schools’ is a clever political gimmick,” Burnett added. “However, there are far better ways for schools to spend $300 million than purchasing energy from a source and at a price that cannot compete in the open market.

“This is a case of government picking winners and losers in the energy market and doing a poor job of it at that,” said Burnett, “while forcing federal taxpayers and the school districts themselves to suffer the consequences.”

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.

For more information …

Renewable Schools Energy Act of 2006, Matheson news release, July 26,

Renewable Schools Energy Act of 2006, Reid news release, July 25,