Study: Illinois Renewable Energy Standard no help to state’s economy

From the Beacon Institute:
(Boston, MA) Closing so-called loopholes in Illinois’s mandated use of renewable energy program, in an effort to expand ‘green’ industries, will harm the state’s economy, according to a study from The Beacon Hill Institute at Suffolk University in Boston.

Illinois requires that its major utilities obtain 25 percent of their electricity sales from renewable sources by the year 2026, but the ability of customers to choose other providers has undermined the intent of the law.

Nevertheless, the targets as presently constituted have the effect of dramatically raising the cost of energy for Illinois citizens, which affects consumers’ ability to meet their other financial obligations. According to the Institute’s analysis, Illinois businesses and residents will pay an additional $4.5 billion for electricity from 2014 to 2026 because of the Renewable Portfolio Standard.

“The industrial costs for Illinois are larger than many other state-level RPS policies that we have measured,” said Paul Bachman, director of research for the Beacon Hill Institute, which has studied standards for several other states. “Compared with similar mandates in other states, the Illinois RPS is more punitive on energy intensive industries. Thus, more businesses and jobs will have an incentive to leave for destinations with less burdensome regulations and cheaper electricity.”

Other findings about the RPS from BHI’s study:

• Illinois’s electricity prices will likely rise by 4.8 percent by 2022
• Employment will be reduced by 8,000 jobs
• Real disposable income will be reduced by $793 million.

Of all states that employ so-called “Renewable Portfolio Standards,” Illinois may be most illustrative of both the Laws of Economics and the Law of Unintended Consequences. Because the most restrictive requirements weigh upon the state’s two largest investor-owned utilities – Ameren Corporation and Commonwealth Edison – customers have flocked to cheaper electricity provided by alternate suppliers. Thus, the demand for costlier power from the big electric companies – burdened by expensive, sporadic renewable generators like wind and solar – will turn out to be weak.

“People shop for price and for quality, and that principle is no different when it comes to electricity,” Bachman said. “The renewable mandate inflates the price for a product that is not superior in quality to its competitor’s – it doesn’t even deliver a cleaner environment. It’s basic common sense, confirmed by our study.”

See the BHI Study, “The Economic Impact of New Jersey’s Renewable Portfolio Standard.” ( http://bit.ly/1l0qwF3 ).

Press release online: http://bit.ly/1pcKUlH

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25 thoughts on “Study: Illinois Renewable Energy Standard no help to state’s economy

  1. “Illinois’s electricity prices will likely rise by 4.8 percent by 2022″

    Sounds like paradise on earth. Can we have that guarantee on everything else? Here in Ontario the expected price increase by 2022 is more like 48%,

  2. “Illinois’s electricity prices will likely rise by 4.8 percent by 2022″

    Do we really have enough data and trend analysis to call the recent conditions the economic climate, or is it just the economic weather?

    Either way, and now with the expected oil price surges factoring in, it’s most likely they’ll have a 4.8% increase by Christmas, 2014.

  3. When O’Bama said that energy prices would ‘necessarily sky-rocket’, didn’t the voters believe him?

  4. Bloke down the pub says:
    When O’Bama said that energy prices would ‘necessarily sky-rocket’, didn’t the voters believe him?
    *************
    No, the people that voted for him don’t even believe he made that comment..

  5. Unintended consequences are always treated like a surprise, but they are not surprising at all. If Will Rogers was still alive, he could point them all out to the ‘consequence-impaired’ politicians and bureaucrats. In the absence of Will, anyone with a little common sense and a very basic knowledge of economics (two items apparently lacking in the people who make these laws) would do.

  6. Because the most restrictive requirements weigh upon the state’s two largest investor-owned utilities – Ameren Corporation and Commonwealth Edison – customers have flocked to cheaper electricity provided by alternate suppliers.

    Why do the requirements not weight upon each KWH equally regardless of who generated or purchased them?
    No doubt there was a political distinction made in law or regulaions.
    But by whom? By what method? When? For which political donors?

  7. My great-grandmother came from Springfield, Illinois. Her father was a personal acquaintance of Abraham Lincoln, though she described it in Victorian terms: “…an intimate friend of Abraham Lincoln”. Their political histories certainly would have put them on speaking terms. Right now both she, her father, and Abe are rolling more than once over in their graves.

  8. Of course we wonder , if the object is to produce low carbon emissions, why they specify “renewable” rather than, you know, low carbon. Since nuclear power produces lower emissions
    (of all types) than either solar or wind, and is one hell of a lot cheaper, the state is , in effect,
    promoting higher emissions power generation. It’s sometimes extremely difficult to overestimate the stupidity of govt actions. Almost half of Illinois power generation is nuclear. They have a fair amount of wind, but the generation varies enormously from one season to the next and between months as well – can triple in the Spring months compared to the Summer months. Max monthly in 2013 about 5%, low monthly about 1.7% of total power generation. Still remember the estimate of wind’s gigantic environmental footprint – 300,000 acres required to site enough 2MW wind turbines to equal the gross output of a single Gen 3 nuclear power plant, which typically shares land with another plant on 100 acres of land, tucked away out of sight.

  9. “Illinois’s electricity prices will likely rise by 4.8 percent by 2022″
    Really? . Yet EIA reports that the electricity rate for all sectors combined for Illinois went up from 7.88 to 8.81 cents per kwh between March 2013 and March 2014. In one year alone it went up 11.8 % and they will now have only an increase of 4.88% over a 8 year period or by 2022. ?

  10. Not to worry, their pension systems won’t make it to 2022 anyway so they will be bankrupt before then.

  11. Let me explain how Illinois works. The purpose of wind is not the generation of electricity. The purpose of wind is the generation of political slush funds.

  12. So, despite what all the polls and serveys say, when you ACTUALLY give people a choice between cheap energy and paying extra for ‘green’ energy, they pick the cheap stuff. Who knew.

  13. We’ve worked hard in Illinois to become a national leader in reducing toxic pollutants like mercury, sulfur dioxide and nitrogen oxide. The next front is greenhouse gases. The impact of global warming from greenhouse gases in Illinois and around the globe could be devastating. We can’t wait for the federal government to act because experts have warned that if we don’t address global warming within the next decade, it may be too late to avoid serious and irreversible consequences.

    —Governor Blagojevich

    http://www.greencarcongress.com/2006/10/illinois_govern.html

    With four of its last seven governors being felons, it’s interesting, as Jon Stewart pointed out, that
    “you are more likely to to end up in jail if you become governor of Illinois than if you are a murderer.” (50% of murders go unsolved)

    With a legacy like that, any wonder that the state is saddled with encumbering deals struck with federal government?

  14. ““Affordable energy in ample quantities is the lifeblood of the industrial societies and a prerequisite for the economic development of the others.” — John P. Holdren, Science Adviser to President Obama. Published in Science 9 February 2001 “

  15. In order to get that much “green” energy, they will have to develop wind farms in Western Iowa and Minnesota and eastern South Dakota and transmit same 300 miles. That will help the economy, but not in Illinois.

  16. Don’t forget the surcharge Illinois owes the rest of us for Dear Leader and the additional $7 trillion debt added in recent years.

  17. “….. loss of 8,000 jobs …. ”
    Another 8,000 on welfare, plus their families. perhaps 30.000 folk with blighted lives in the name of AGW.
    How do “the team” sleep at night?

  18. sakhara says:
    June 17, 2014 at 10:18 am

    Bloke down the pub says:
    When O’Bama said that energy prices would ‘necessarily sky-rocket’, didn’t the voters believe him?
    *************
    No, the people that voted for him don’t even believe he made that comment..

    A little less than half of the people that voted for President Obama do not earn the money they spend on energy. When the Government is paying for electricity, the price does not matter. To people who vote for a living, statements about the resources required from people who work for a living do not matter.

  19. “According to the Institute’s analysis, Illinois businesses and residents will pay an additional $4.5 billion for electricity from 2014 to 2026 because of the Renewable Portfolio Standard.”

    Do government agencies also pay the higher electricity rates?

    That would make it an even bigger whopper if government is making itself needlessly waste taxpayer money on higher energy costs.

  20. 17 June: Chicago Tribune: Julie Wernau: EPA: Carbon rules could ensure nuclear power’s survival
    Environmental Protection Agency Administrator Gina McCarthy said Tuesday that the agency’s proposed carbon rules are designed to boost nuclear plants that are struggling to compete.
    “There are a handful of nuclear facilities that because they are having trouble remaining competitive, they haven’t yet looked at re-licensing (to extend their operating lives). We were simply highlighting that fact,” McCarthy said at a roundtable discussion with business leaders in Chicago…
    The comments by the highest ranking official charged with carrying out the Obama administration’s environmental policies firmly positions the United States as a supporter of nuclear power. Those views run counter to Germany which is phasing out nuclear power over health and environmental concerns following Japan’s Fukushima Daiichi nuclear disaster in 2011.
    Illinois’ reduction targets also reward the state if it chooses to prop up the six percent of nuclear power in the U.S,. that the agency has determined is under threat of extinction…
    Some have argued that the state’s target doesn’t accurately reflect the much larger percentage of nuclear power under threat here; while others have argued that the rules open the door for nuclear operators like Exelon to press for special treatment as state carbon plans are developed.
    Last month Exelon successfully pushed Illinois legislators to adopt a resolution in favor of pro-nuclear policies that go beyond the carbon rule.
    The resolutions ask state regulatory bodies to prepare reports that explain the “societal cost” of increased greenhouse gas emissions in the state if nuclear plants close, and a report from the Department of Commerce and Economic Opportunity that looks at job losses that would come from closing nuclear plants…
    Illinois received a whopping 49 percent of its power from nuclear plants in 2012, a source of power that doesn’t emit carbon. It also means that Illinois doesn’t get credit for carbon cuts that came from the closures of several coal-fired power plants between 2005 and 2012…

    http://www.chicagotribune.com/business/breaking/chi-epa-carbon-rules-nuclear-power-20140617,0,3627471.story

  21. Off-topic, but relevant, I hope. Average Illinois personal income taxes up 33% in past two years as a “temporary” measure. Illinois Real Estate taxes gobble up 2.5%-3.0% of a home’s value each YEAR. $400k home (about as nice as a Texas $200k home) requires $12,000 in real estate taxes each year. Sales taxes through the roof – often 8.5% to 10.0%. Illinois gasoline taxes push the current price to as high as $4.56 a gallon (I saw it today near Midway airport by Chicago)

    It costs a LOT to house our elected politicians in prison. Sorry about Obama. Lincoln and Reagan worked out OK, though…….

    Love dem Bears, though………

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