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Governor says 'war' is on to pass costly energy mandate bill
Biz continues defense against plan to add billions to electricity costs Gov. Ed Rendell this week called for an all-out "war" to win passage of legislation (H.B. 80) that would extend certain renewable energy mandates under Pennsylvania's 2004 Alternative Energy Portfolio Standards Act, resulting in higher costs for electricity producers and consumers, not to mention negatively impacting the reliability and adequacy of Pennsylvania's electric generation supply The governor made the comment at a legislative breakfast hosted by an environmental advocacy group that favors increasing the cost of electricity at a time when job creators and residents can least afford it. Estimates are that the additional mandates contained in H.B. 80 could add as much as $9 billion to $12 billion to the cost of electricity purchases in future years at a time when job creators and families can least afford it. This equates to at least a 10 percent to 13 percent increase in electric rates. The Office of Small Business Advocate has indicated that H.B. 80 "would increase default service electric rates for small business ratepayers, at least in the near term." As the backbone of the economy, small business will be looked on to drive recovery from the worst financial crisis since the Great Depression. Adding yet another unnecessary cost burden will do little to help fuel this significant economic engine. With electric rate caps coming off and the uncertainties in the market as a result, now is not the time to increase the mandates for more expensive forms of energy. This is especially true considering the renewable energy mandates established by the 2004 AEPS law have not yet been fully implemented, and that law's impact on cost is not yet known. Even a 2007 state Public Utility Commission report did not recommend any changes to the 2004 law at this time. But cost concerns aren't the only reason why PA Chamber members oppose the legislation. The overall approach to energy strategy it seeks to advance is also problematic. The Commonwealth needs a commonsense strategy that approaches alternative energy within the framework of a free enterprise system that balances energy needs with viable sources to meet those needs. House Bill 80 would have government pick and choose the sources of alternative energy to mandate, rather than enabling innovative businesses and families to make energy choices from both traditional and renewable sources that are best for them. And increasing mandated percentages of particular technologies creates inflexibility in the energy market and removes business innovation from the equation. Policymakers cannot accurately predict what technologies will exist or be economically viable in the years 2021 to 2026. The development of Marcellus Shale natural gas reserves, for instance, was not anticipated a decade ago. Abundant and affordable energy is as critical for job creators as it is for individuals and families. Pennsylvania must take reasonable steps to ensure adequate supplies of traditional and renewable sources at affordable prices in the future; the last thing Pennsylvania should be doing is making policy decisions that could make energy more expensive. House Bill 80 is not the solution for creating a sound energy policy for the Commonwealth that will fuel the economy, provide for a comfortable existence and allow the free market to determine viable alternative energy sources. |
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