Logic Not RENEWable for Environmentalists

By James Wigderson
Special Guest Perspective for the MacIver Institute

If April showers bring May flowers, what do May flowers bring?

Rate increases!

Well, rate increases and twisted logic from RENEW Wisconsin.

Prices at the gas pump are going up, up, up, and it’s getting reflected in higher electricity costs. Last Thursday the Public Service Commission (PSC) approved a roughly 1% increase in electricity rates for We Energies to reflect the transportation costs of bringing fuel for energy plants to Wisconsin, especially coal. They will meet again on April 28th to complete approval of the rate increase when it will be presented in final written form for the commissioners.

The average residential electricity customer of WE Energies will see $1 per month increase on their bills, a $25 million increase overall. The rate increase goes in to effect on May 1.

The vote by the PSC on Thursday brought forth some bizarre I-told-you-so’s from an environmental group. RENEW Wisconsin issued a press release saying the increase in energy costs is the reason we need more reliance on renewable energy sources:

Diesel fuel costs have jumped to approximately $4.00 a gallon this year, propelled by political unrest in the Middle East, declining petroleum output from Mexico, a weakening dollar, and other factors. We Energies’ request predated the ongoing civil war in Libya.

“While we cannot control any of those price drivers, we can more effectively cushion their effects by diversifying our energy generation mix with locally produced wind, solar, small hydro, and biogas electricity,” said Michael Vickerman, executive director of RENEW Wisconsin, a statewide organization advocating for public policies and private initiatives that advance renewable energy.

“The coal mines aren’t getting any closer to Wisconsin. Therefore we have to be serious about reducing our dependence on fossil fuels that are tied to the global oil supply picture. Now is not the time to skimp on investments in conservation and renewable energy that will help stabilize the utility bills of businesses and residents,” Vickerman said.

Gee, you’d think the environmentalists would be happy WE Energies was using a train to transport the coal.

In all seriousness, it is worth noting that the proposed rate increase is less than the likely rate increases about to be requested by WE Energies for 2012 and 2013. The “low single-digit” rate increases that are on the horizon are to fund two projects near and dear to environmentalists, $900 million project to reduce air pollution from an Oak Creek coal power plant and $367 million for the 90 wind turbines at Glacier Hills Wind Park in Columbia County.

This is where RENEW Wisconsin loses all credibility. Part of the reason WE Energies was building costly windmills is a state mandate requiring the utility to generate 8.27 percent of its Wisconsin retail electric sales from renewable energy by 2015.

That mandate could have been much worse. The “Clean Energy Jobs Act” (CEJA) supported by RENEW Wisconsin during the last legislature would have increased the renewable energy mandate to approximately 25 percent by 2025. Statewide, energy ratepayers could have seen their rates go up by $1000 per household annually.

Even the Democrats controlling the state Senate last year would not go along with the proposed renewable energy mandate that could have destroyed as many as 40,000 jobs.

So, you would think that a group like RENEW Wisconsin that supported mandated increases in utilities’ renewable energy portfolios would be reluctant to mention a teeny-tiny increase in energy rates from the cost of transporting coal by rail.  If energy rate increases are to be the drivers of public policy concerning renewable energy, there is no justification for keeping the state’s current mandates, let alone imposing new ones that RENEW Wisconsin supports.

There I go again. Injecting facts into a debate about the environment.

Most of WE Energies’ customers will be happy to pay the extra $1 per month if that meant they could avoid paying even higher rates for renewable energy mandates supported by RENEW Wisconsin.

During the CEJA debate, a poll conducted by Public Opinion Strategies found 68% of voters opposed to increased mandates for renewable energy when told the costs.

Ironically, WE Energies is listed by RENEW Wisconsin as a “Terawatt sponsor,” meaning the utility has donated at least $2,500 to the organization.

What?  Yes, you read that right.

Perhaps WE Energies’ shareholders should be concerned that they make donations to an organization that supports policies that would lead to massive rate hikes in the future.

Us ratepayers certainly should be.

Because renewable energy mandates will always, always lead to rate increases. Come rain or shine.