For Immediate Release:
Thursday, November 15, 2012
Missouri’s Renewable Energy Standard will be bad for business, jobs and investment
(Boston, MA, November 15, 2012) A new study, which analyzes Missouri’s Renewable Energy Standard (RES), offers several reasons for Gov. Jay Nixon and the state legislature to assess whether the voter-initiated mandate should be revisited.
The report, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that Missourians will likely pay $1.41 billion more for power in 2021 because of the state's RES, and it could cost them as much as $2.2 billion more. Missouri’s RES requires utilities to generate 15 percent of electricity from renewable sources by 2012. However, the use of renewable sources does not reduce greenhouse gas emissions and provides no environmental benefit. Wind and solar facilities require significant fossil fuel backup power sources to accommodate variations in the availability of wind and sun. That’s because wind power is intermittent and fossil-fueled generators are called upon to fill the gaps to compensate for wind fluctuation. The powering up and down of conventional generators cause more pollution than they do when run consistently without wind or solar.
“The mandate encourages inefficient energy,” said Paul Bachman, director of research for the Beacon Hill Institute and a co-author of the report. “By requiring utilities to forego lower-cost sources of conventional energy, and instead use high-cost ‘green energy,’ the harmful effects on household budgets will be felt.”
The Beacon Hill Institute analysis produced low, medium, and high estimates of economic impacts from Missouri’s RES, based upon U.S. Energy Information Administration numbers. Other findings from the BHI report:
· Over the period of 2013 to 2021, the mandate will cost Missourians an additional $4.47 billion over conventional power, within a range of $2.06 billion and $6.87 billion;
· Missouri's electricity prices will increase by an average of 1.27 cents per kilowatt-hour (kWh), or by 14.8 percent, in 2021, within a range of 46 cents per kWh, or by 5.3 percent, and 1.97 cents per kWh, or by 23 percent. Costs for customers of investor-owned utilities, such as Ameren, will be higher;
· By 2021 Missouri will lose an average of 6,065 jobs, within a range of between 2,185 jobs under the low-cost scenario and 9,450 jobs under the high-cost scenario;
· In 2021 the RES will reduce disposable income by $675 million, within a range of $245 million and $1.055 billion; and
· Investment in the state will decrease in 2021 by $75 million, within a range of $27 million and $116 million.
Complete Study, “The Economic Impact of Missouri's Renewable Energy Standard” (PDF)
01/03/2013 1:13 PM
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