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PPROA Pipeline ~ May 2015
It is a bad time to be in the renewable energy industry
2015 may go down in the books as the year support for renewable energy died. Policy adjustments—whether for electricity
generation or transportation fuels—are in the works on both the state and federal levels.
About a decade ago, more than half of the states enacted strict Renewable Portfolio Standards (RPS). A few other states, agreed to
voluntary targets. Now, nearly one-third of those states are reconsidering the legislation that sounded so good in a different energy
era. Back then, it was widely believed that there was an energy shortage and “dealing with global warming” was a higher public
priority.
“Roughly 30 bills relating to the Oklahoma wind industry have been filed in the state legislature in the 2015 session, including at
least one targeting the tax breaks and others attempting to alter regulatory policies,” reports Fox News. On April 16, the Oklahoma
House voted, 78-3, to eliminate the wind energy tax credit. The measure now moves to the Senate, where it is expected to pass, and
will likely be headed to Governor Mary Fallin soon.
Oklahoma is just one state in what has become a new trend, but it isn’t the first state to reconsider its renewable energy policies. That
distinction goes to Ohio, which in May 2014, passed legislation that paused the state’s RPS for two years. Governor John Kasich
signed it in June.
Earlier this year, West Virginia became the first state to repeal its RPS.
Last month the Texas Senate voted to end its RPS and another program that, according to the Star Telegram, “helped fuel the state’s
years-long surge in wind energy production.” The bill now moves to the House State Affairs Committee. It is expected to pass the
House and be signed by Governor Greg Abbott.
Coming up, Kansas, North Carolina, and Michigan have legislation that revisits the states’ favorable renewable energy policies. New
Mexico and Colorado had bills to repeal or revise the RPS that passed in one chamber, but not in the other.
While Louisiana doesn’t have an RPS, it does have generous tax credits for solar panel installations that have exploded the cost to the
state’s taxpayers. Repealing or revising the policy is a key priority in the current legislative session.
“Taxpayer support for wind energy is also losing momentum in Congress,” says Fox News. It points out: “Capitol Hill lawmakers at
the end of last year did not extend the Federal Production Tax Credit (PTC).
It is not just wind energy that has lost favor in Congress. The Ethanol mandates—known as the Renewable Fuel Standard (RFS)—
are being re-examined, too.
On January 16, 2015, Senators Dianne Feinstein (D-CA) and Pat Toomey (R-PA) introduced the “Corn Ethanol Mandate Elimination
Act of 2015.”
More recently, a “former Obama economic adviser” issued a report calling for changes to the 10-year-old RFS. Harvard University
Professor Jim Stock served on the Council of Economic Advisers in 2013 and 2014. The Hill states: “His report comes at a time of
growing angst among lawmakers, regulators and the industry over the future of the RFS, which mandates fuel refiners blend a certain
volume of ethanol and biodiesel into their traditional gasoline and diesel supplies.”
Addressing growing skepticism and dwindling investment in biofuels, The Economist, on April 18, states: “Some companies, indeed,
are starting to give up.”
Looking at all the policy reviews, the trend is clear. As Watchdog.org, in a report titled: “Why repealing the renewable energy
mandates is good for the economy,” concludes: “The best policy for the states is to leave energy consumption decisions to consumers
in the market rather than legislate them.”
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the
companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program:
America’s Voice for Energy—which expands on the content of her weekly column.