The U.S. Energy Information Administration (EIA) released its Residential Energy Consumption Survey (RECS), showing nearly one-third (31 percent) of American households experienced “energy insecurity” in 2015. More than half of black households and over 40 percent of Hispanic households also reported being energy insecure.
EIA defines “energy insecurity” as when a household reports “facing a challenge in paying energy bills or sustaining adequate heating and cooling in their homes.” In the latest survey, which collected data from “more than 5,600 households in housing units statistically selected to represent the 118.2 million housing units that are occupied as a primary residence,” 21 percent of households, roughly 25 million homes, reported “reducing or forgoing food or medicine” to pay their energy costs. Six percent of these households, or 7 million homes, reported facing this difficult decision every month.
Another 11 percent, 13 million households, reported setting their thermostat at an “unhealthy temperature,” while 14 percent of households, 17 million homes, reported receiving a disconnection or delivery stop notice for energy service. Of these, 2 million homes, or 1.7 percent, reported receiving one of these notices almost every month. Thirteen million households, roughly 11 percent of homes, also reported dysfunctional heating or air conditioning equipment without the ability to fix or refuel them.
These alarming statistics were reported in a year, 2015, that EIA notes energy expenditures were at their lowest level in a decade. Unfortunately, government policies in a majority of states are exacerbating this problem by forcibly limiting the use of affordable and abundant fossil fuel sources such as coal, oil, and natural gas in the form of renewable energy mandates.
Renewable energy mandates—often referred to as “renewable portfolio standards”—force expensive, heavily subsidized, and politically favored electricity sources such as wind and solar on ratepayers and taxpayers while providing few, if any, net environmental benefits.
A study by the liberal Brookings Institution found replacing conventional power with wind power raises electricity prices 50 percent, and replacing conventional power with solar power triples electricity costs.
Unsurprisingly, in states with renewable power mandates, energy rates are rising twice as fast as the national average and states with renewable mandates had electricity prices 26 percent higher than those without one. According to EIA, the 29 states with renewable energy mandates (plus the District of Columbia) had average retail electricity prices of 11.93 cents per kilowatt hour (cents/kWh), while the 21 states without renewable mandates had average retail electricity prices of just 9.38 cents/kWh. The only state without a renewable energy mandate to have retail electricity prices higher than the national average of 10.41 cents/kWh was Alaska at 17.93 cents/kWh.
In just 12 states, the total net cost of the renewable mandates was $5.76 billion in 2016 and will rise to $8.80 billion in 2030, a 2016 study revealed.
The higher energy costs guaranteed by a switch from fossil fuels to higher-cost “renewable” electricity sources, such as wind or solar, would lead to slower economic growth, as affordable energy is the key to productivity growth and the production of virtually all goods and services.
To ensure that fewer households face energy insecurity, elected officials and agency regulators at the national, state, and local levels should repeal subsidies, taxes, and regulations, such as renewable energy mandates, aimed at reducing the use of fossil fuels.
The following documents provide more information about renewable energy mandates and fossil fuels.
The Social Benefits of Fossil Fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.
Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).
Evaluating the Costs and Benefits of Renewable Portfolio Standards
This paper by Timothy J. Considine, a distinguished professor of energy economics at the School of Energy Resources and the Department of Economics and Finance at the University of Wyoming, examines the renewable portfolio standards (RPS) of 12 different states and concludes while RPS investments stimulate economic activity, the negative economic impacts associated with higher electricity prices offset the claimed economic advantages of these RPS investments.
Ten State Solutions to Emerging Issues
This Heartland Institute booklet explores solutions to the top public policy issues facing the states in 2018 and beyond in the areas of budget and taxes, education, energy and environment, health care, and constitutional reform. The solutions identified are proven reform ideas that have garnered significant support among the states and with legislators.
Debunking Four Persistent Myths about Hydraulic Fracturing
This Heartland Institute Policy Brief by Policy Analyst Timothy Benson and former Heartland communications intern Linnea Lueken outlines the basic elements of the fracking process and then refutes the four most widespread fracking myths, providing lawmakers and the public with the research and data they need to make informed decisions about hydraulic fracturing.
Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents
This study from Jonathan Lesser of the Manhattan Institute argues California’s clean power regulations, including the state’s renewable power mandate, is a regressive tax that harms impoverished Californians more than any other group.
The Status of Renewable Electricity Mandates in the States
The Institute for Energy Research finds states with renewable electricity mandates have on average 40 percent higher electricity rates than those without such mandates.
What Happens to an Economy When Forced to Use Renewable Energy?
The Manhattan Institute conducted an economic analysis of the effects renewable portfolio standards (RPS) had on the average price of electricity in states with mandates compared to those without mandates. The study found residential and commercial electricity rates were significantly higher in states with RPS mandates than in states without them.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact John Nothdurft, Heartland’s director of government relations, at [email protected] or 312/377-4000.