RPS Reform Update

By Nick Lawton, Staff Attorney 

The debate about Renewable Portfolio Standards (RPSs) continues to rage throughout the United States. This post provides updates on legislative proposals to modify RPSs in several states and provides information on how fossil fuel interests have backed the efforts to weaken or repeal these policies.

Hawaii

Hawaii is poised to become the first state in the nation to have a goal of becoming 100% powered by renewable energy. A bill to ramp up the state’s RPS from 40% by 2030 to 100% by 2050 has recently cleared committees in both the state House and Senate. The bill enjoys Democratic sponsorship, and since Democrats control both chambers and the governor’s seat, it may stand a real chance at becoming law. A law targeting 100% renewable energy would make a great deal of sense in Hawaii. Currently, the state spends between $3 billion and $5 billion annually on importing fossil fuels, according to the bill’s sponsor, Senator Mike Gabbard. Spending so much on costly imported fossil fuels leads Hawaii to have the highest electricity rates in the nation. Renewable energy would very likely save Hawaii money and reduce energy bills. Moreover, the goal seems attainable. As Senator Gabbard put it, “[e]ven our utility is saying we can hit 65 percent by 2030, so 100 percent by 2050 is definitely doable.” Hopefully, Hawaii will make this bill into law and show other states how to achieve a 100% renewable power grid.

Michigan

I blogged last week about competing proposals in the Michigan legislature from Republicans, who hope to weaken or repeal that state’s RPS, and Democrats, who aim to double it. Those proposals came out shortly before Republican Governor Rick Snyder announced his own energy plan. Governor Snyder’s energy plan bucks the partisan trend of Republican opposition to renewable energy by proposing that renewables play an increasing role in meeting the state’s energy demands. In fact, Governor Snyder’s proposal is even stronger than the Democrats’, although it falls short of formally increasing the RPS itself.

Governor Snyder’s energy proposal lays out two options for renewables in the state. If renewables remain more costly than natural gas, the Governor envisions renewables and efficiency supplying a total of 30% of the state’s energy by 2025. On the other hand, if renewables beat natural gas on cost (a good bet, given the steadily declining price of wind and solar power and the volatility of gas prices), then the Governor’s plan would call for renewables and efficiency to supply 40% of the state’s energy by 2025. In contrast, the state’s Democrats merely proposed an RPS expansion to 20% by 2022.

Governor Snyder was unusually candid about his goal of weaning Michigan off its reliance on coal. Michigan has “a big problem,” he stated, “and to be blunt, it’s coal.” Noting that Michigan is among the states most reliant on coal power, he noted that “[t]he long-term future will be moving away from coal.”

Governor Snyder’s energy plan is a good step forward for Michigan. Not only would it improve the state’s renewable energy target of 10% by 2015 (which is among the  weakest of any state with an RPS policy), but it would also improve the state’s environment and economy, allowing Michigan to continue attracting good, green-collar jobs. Michigan’s legislature should act quickly to make Governor Snyder’s plan into law.

New Mexico

The New Mexico House of Representatives recently passed a bill that would freeze the RPS in that state at 15%, if passed into law. The current RPS rate is 15%, but it is scheduled to increase to 20% by 2020. The bill would eliminate that increase, freezing the RPS. However, on March 17, the measure stalled in the New Mexico Senate Conservation Committee by a 6 to 2 vote. Thus, New Mexico’s RPS appears safe, for the moment.

Kansas

Kansas, however, is considering a similar bill that would repeal upcoming increases in that state’s RPS. Currently, Kansas’s RPS requires 10% renewable energy for 2011-2015, 15% for 2016-2019, and 20% from 2020 onward. The bill currently under consideration would eliminate the latter two requirements, effectively freezing the requirement at the current level of 10%. The bill is currently in committee.

Koch Brothers Funding for RPS Reductions

Much of the backing for the efforts to weaken or repeal RPSs seems to come from the Koch Brothers, whose $50 billion net worth derives largely from investments in fossil fuels. For example, the Koch Brothers funded the successful effort to freeze Ohio’s Renewable Portfolio Standard, a law that will likely prove costly to the state. Similarly, the Koch-backed American Legislative Exchange Council funded the unsuccessful recent effort to roll back Colorado’s RPS.

The Koch brothers’ influence is especially stark in Kansas, which makes sense given the fact that Koch Industries has its headquarters in Wichita. An editorial in the Garden City Telegram discusses how the Koch brothers have funded the RPS repeal effort in that state, noting that “Koch involvement in the run on the RPS has been significant, and a matter of contention.” For example, the Koch brothers funded a study from Utah State Professors Ryan Yonk and Randy Simmons (the “Charles G. Koch Professor of Political Economy”), which concluded that the RPS has harmed the state’s economy. However, when a Democratic lawmaker asked about the funding for the study, Republican Senator Rob Olson cut off the question, ending that line of inquiry. (Koch Industries is among the largest contributors to Senator Olson’s candidacy.)

That pattern of funding studies and advocacy against renewables and for fossil fuels is typical of the Koch brothers. In fact, the Koch brothers have used their $50 billion net worth to fund a network of advocacy organizations so complex that its critics have dubbed it “the Kochtopus.” That network has its tentacles in many states and works through many shell organizations, such as Americans for Prosperity and the American Legislative Exchange Council (recently lampooned by John Oliver).

But neither citizens nor states should be fooled by the Koch brothers’ relentless advocacy for fossil fuels and against renewables. In truth, Renewable Portfolio Standards are sound policies. They have succeeded in dramatically expanding the share of renewable energy in many states and have done so without significant costs to ratepayers. Most states with RPSs are well on their way to meeting targets, and rate impacts have so far been generally under 3%. States should follow the lead of Hawaii and California, which are seeing positive returns from their investments in renewable energy. RPSs work. They do not break the bank. They are sound policy, and states should continue to expand them.