Legislators in Maryland and Illinois have proposed bills
that would expand each state’s Renewable Portfolio Standard (RPS),
substantially increasing the amount of renewable energy that utilities will
have to build or buy in the next decades. These bills would both benefit the
environment and grow the states’ economies by creating well-paid, green-collar
jobs. In contrast, Ohio, which froze its RPS last year, has seen its jobs
growth dwindle as a result. In short, state investments in renewable energy
create jobs, and withdrawing support for renewable energy quashes jobs growth.
Maryland’s
RPS-Doubling Bill
The Maryland
Clean Energy Advancement Act of 2015 would double the state’s RPS on a
quick timeline. Currently, Maryland
requires utilities to obtain 20% of their energy from renewables by 2022. Under
the new bill, the utilities would need to obtain 40% renewable energy by 2025.
Similarly, the bill would also double the RPS’s carve-out for solar power.
Currently, solar power must contribute 2% of the state’s energy by 2022, while
the new bill would require 4% by 2025.
The Maryland bill’s lead sponsor Sen. Brian J. Feldman
(D-Montgomery) argues
that the legislation is “a golden opportunity” for the state to develop “good
paying jobs and a much needed boost to [the] economy.” Similarly, co-sponsor
Delegate Bill Frick (D-Montgomery) notes
that the state’s “solar industry is actually contributing more to our state
than our iconic crabbing industry.” However, other legislators have expressed concern
about possible compliance difficulties for utilities and increased costs for
ratepayers. Delegate Frick has responded to those concerns by expressing willingness
to amend the bill to more modestly require only 25% renewable energy by 2025.
The Maryland Department of Legislative Services has evaluated
the bill’s fiscal impacts, which would fall primarily on ratepayers. Although it
notes substantial uncertainties in its analysis, it projects annual compliance
costs between $11 million and $ 44 million in 2018, rising to between $141
million and $566 million in 2025 and beyond. Translated onto utility bills,
this would mean an increase of between $0.17 and $0.68 per month in 2018, and
between $2.05 and $8.20 in 2025. The range in price increases has to do with
Alternative Compliance Payments. If utilities fail to obtain sufficient
renewable energy, they must instead pay into a state-managed fund. Alternative
payments cost more than buying or building renewable energy. Thus, if utilities
fail to comply through renewable energy development, their failure will cost
the state’s ratepayers substantially. Moreover, the alternative payments do not
necessarily create jobs in the way renewable energy development does. Thus, if
this bill becomes law, Maryland’s utilities should make sure to invest in
actual renewable energy development in order to limit rate increases and
promote economic growth in the state.
Illinois’s RPS
Expansion Bill
The Illinois
Clean Jobs Bill has several goals.
It would increase the state’s RPS, strengthen energy efficiency requirements,
and call for the development of market-based strategies to reduce carbon
emissions. The current RPS calls for utilities to obtain 25% renewable energy
by 2025, while the new bill would require 35% renewable energy by 2030.
Similarly, the bill would double the state’s energy efficiency requirements
from 10% by 2025 to 20% by 2025. (The energy efficiency measure requires
utilities to meet a portion of demand by reducing energy usage, for example
through efficient appliances.) Finally, the bill requires the Illinois
Environmental Protection Agency to develop a market-based means for compliance
with the federal Clean Power Plan, seemingly focusing on a cap-and-trade
system for CO2 emissions.
The bill’s main sponsor, Senator Don Harmon (D-Oak Park), argues
that “[t]here is no time to waste” in passing this bill, which would promote
“new jobs, better health, and a cleaner environment.” Sen. Harmon notes that “[a]s
strong as the clean energy economy is today, with 100,000 clean energy jobs
throughout the state, Illinois is at a tipping point.” Co-sponsor
Representative Elaine Nekritz (D-Buffalo Grove) also noted that “too many
states are beginning to outpace” Illinois in renewable energy development. For
example, the Sierra Club notes
that in 2014 Oklahoma saw the development of more than 600 MW of wind energy,
while Illinois saw none.
Although the state does not appear to have evaluated the
bill’s rate impacts yet, the Illinois Science and Technology Institute reports
that the bill would create roughly 32,000 new jobs in the state. Moreover, the
bill carries
forward an existing 2% limit on rate increases associated with the RPS.
Thus, the bill would not increase rates more than 2%—but would also stop
operating once the utilities hit that cap.
Ohio’s Dwindling Jobs
Growth
Meanwhile, Ohio froze
its RPS last year. Essentially, that measure meant that utilities would not
have to take any further action toward RPS compliance until 2017. Nominally,
Ohio’s RPS freeze was a ‘free-market’ move to avoid ‘picking winners and
losers.’ In reality, those arguments have always been false,
and the RPS freeze is really an effort to coddle
the fossil fuel industry. Now, Ohio is seeing the first negative impacts
from its move away from renewable energy. Ohio has slid
from 8th to 10th place in terms of jobs in the solar
industry. Although the state is still seeing jobs growth in the industry, that
growth rate is slowing, and other states are leaping ahead. Andrea Luecke,
president and executive director of the Solar Foundation, notes
that Ohio’s RPS freeze may continue to lead to further declines in solar jobs
in the state.
The Upshot: Renewable
Energy Investments Create Jobs and Drive Economic Growth
The lesson is clear. Ohio froze renewable energy
requirements and is losing its potential for clean-energy job growth. Illinois
is considering a renewable energy mandate expansion that would expand clean
energy jobs in the state by roughly a third. Meanwhile, California, a clean
energy leader, has seen clean energy jobs grow more than four times as quickly
as other states. Investments in renewable energy create jobs and drive state
economies. Maryland and Illinois should pass their RPS-expansion bills, and other
states should follow suit.
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