Electricity prices in the 29 states with renewable electricity mandates are nearly 40 percent higher, a new study by the Institute for Energy Research
"While the renewable mandates may not be the only reason electricity prices are higher in those States, these mandates likely contribute to higher prices and certainly are not helping to decrease the price," the study said.
This is due to the fact that generating power from alternative sources is generally more expensive and requires significant back-up capacity. The 15 states with the lowest electricity prices generate most of their electricity from traditional fossil fuel sources such as coal and natural gas or hydroelectric power.
The mandates require utilities to use a certain percentage of"ìrenewable" sources of power (such as solar, wind, or biomass) instead of these traditional sources to run their generators. Most states have target dates by which renewable energy sources must account for up to 20 or 25 percent of their total power output.
Not surprisingly, the study found that only 14 of the 29 states with renewable energy mandates and the seven states with non-binding renewable energy goals are on track to meet them.
That includes California, which adopted the first and most aggressive renewable energy mandate in the country. Despite the 9th highest electricity rate in the nation (15.1 cents/kw hour), only 13 percent of the state’s power came from qualified renewable sources in 2009. Considering California’s imploding financial condition, reaching 33 percent by 2020 is highly unlikely.
Maryland’s mandate requires 20 percent use of renewables by 2022, but the state is likewise not on track to meeting it despite the 11th highest electricity bills (14.5 cents/ kw hour) in the nation.
In contrast, electricity rates in Virginia - which has no state mandate, but does have a 15 percent renewable energy "goal" by 2025 - are considerably lower (10.4 cents/kw hour).
Last year, Virginia Gov. Bob McDonnell dropped out of the Governors’ Wind Energy Coalition after the group sent a letter urging Congress to adopt a national renewable energy mandate that would drive up electricity costs in non-mandate states. Credit Suisse has estimated that it would take $750 billion in capital expenditures to supply 20 percent of the nation’s electricity demand from renewable sources.