Good ideas don’t always make good public policy.
In November, you’ll be asked to vote on Initiative 937, the “renewable energy” initiative. It sounds like a great idea, but it is bad public policy that will cost you a lot of money and may leave us stranded for power in the future. Here’s why.
First, let’s examine the “idea.” I-937 would force all utilities with more than 25,000 customers, whether investor owned like Puget Sound Energy or publicly owned like the Snohomish County PUD, to sell 15 percent of their electricity from renewable sources by 2020.
Sounds good, right? But the initiative expressly excludes hydropower, Washington’s most affordable and successful form of renewable energy – the energy which emits no greenhouse gases. In fact, nearly 70 percent of our electricity is produced by hydropower, but it’s banned from I-937.
Let me be clear. Just about everyone favors using more renewable energy, and the Association of Washington Business strongly supports the production, development and use of renewable energy. It is important to diversify our generating sources and to invest in alternative sources.
But we don’t support I-937 because it’s not necessary and it won’t work.
Banning dependable, affordable hydropower from I-937 leaves only wind, solar, tidal and biomass, but not all kinds of biomass, either. Black liquor from pulping which produces electricity doesn’t count as a renewable even though it comes from trees.
In reality, I-937 is known as the “wind power” initiative. But there is no way we can produce 15 percent of our electricity from wind power by 2020. California, which has been a national leader in wind power development for 20 years, gets only 2 percent of its electricity from wind power. What’s the biggest source of renewable energy in California? Hydropower. But hydropower is banned from I-937.
To meet the mandate required by I-937, Washington utilities will have to sell our affordable hydropower out of state and buy more expensive wind power. Forcing our utilities to sell cheap energy and buy more expensive energy defies common sense. How is that good for families struggling to make ends meet and pay their power bills?
I-937 isn’t necessary, because Washington already gets the vast majority of its electricity from renewable energy – hydropower. If the proponents of I-937 had included hydropower in their renewable energy sources, then many utilities would already meet the requirement. But instead, I-937 is set up for failure, forcing utilities to buy more expensive power from out of state or pay costly fines and penalties.
In the end, you and I are going to be the ones who pay. I-937 is going to cost hundreds of millions of dollars for employers and homeowners.
The Department of Energy estimates that Washington customers already spend $4.64 billion for electricity. To meet the mandates of I-937, customers will have to spend an additional $185 million to $370 million.
Those costs could increase dramatically if you consider that wind generation is heavily subsidized by a federal production tax credit that expires at the end of next year. This credit disguises the real cost of wind energy by artificially reducing the cost by 40 percent. If the credit is not renewed by Congress, it will cost that much more for utilities to bring it to Washington under the I-937 mandate.
Costs will increase further if the already limited sites for wind turbines in Washington and neighboring states are restricted because they are located in areas populated by birds or in migrating bird flyways or in places where citizens object, such as near Ellensburg.
Another important consequence of I-937 is unemployment. The high electricity costs passed on to businesses will result in thousands of layoffs. In fact, the Washington Research Council, a non-partisan organization that analyzes proposed public policy, estimates that if I-937 passes, 3,600 to 7,100 Washington residents will lose their jobs – especially in the manufacturing sector.
The Association of Washington Business represents more than 6,000 employers across the state who provide more than 600,000 jobs. Our members range from large businesses to small “mom and pop” operations and we even represent some wind energy companies.
Our members know we support all forms of renewable energy including wind energy, but we don’t support arbitrary, expensive, unnecessary and unworkable government mandates.
We will all face higher energy bills if I-937 passes. Think about the real implications of this complex initiative before you vote. Vote no on I-937.
Don C. Brunell is president of the Association of Washington Business. For more information: www.nooni937.com.
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