Centennial Institute on Renewable Portfolio Standards
The Centennial Institute in Colorado has a new policy brief out looking at the costs of RPS mandates to consumers. The findings shouldn’t come as a surprise:
The average electrical rate of all 13 states without an RPS, based on figures provide by the Energy Information Administration (EIA), is 8.52 cents/kWh. This is 24% lower than the average of the other 37 states, at 10.57 c/kWh. If we include states with voluntary goals among states without an RPS, then the 30 states with enforceable renewable mandates claim an average retail rate of 11.07 c/kWh. This is 21% higher than all the states without a mandate.
If we go on to exclude Alaska and Hawaii (often done to prevent those states’ unique geographic differences from skewing the dataset), we find that the states within the contiguous U.S. with enforceable renewable mandates have average retail electricity rates 25% higher than those without.
Of course, RPS mandates come on top of all the other ways that renewables are privileged in the marketplace: government loan guarantees, direct subsidies, tax credits and the like. In other words, renewable energy generators get access to capital at a discount, preferential tax treatment, subsidies and then mandates for utilities to purchase their products.
Interestingly, despite not having an RPS mandate, the state that gets the most energy from renewable sources is Idaho, where over 70% of the state’s energy comes from hydroelectric power generation.