New Nevada Law Mandates Costly 100 Percent Carbon-Dioxide-Free Electricity
Nevada Gov. Steve Sisolak signed a bill requiring 50 percent of the electricity utilities in the state provide come from renewable resources by 2030.
On Earth Day, Nevada Gov. Steve Sisolak signed into law Senate Bill 358, requiring 50 percent of the electricity provided by utilities in the state come from renewable resources by 2030 and setting a goal for utilities get 100 percent of their electricity from sources that don’t emit carbon dioxide during generation by 2050.
Senate Bill 358 passed in rapid fashion on consecutive days, with Nevada’s Senate unanimously approving it on April 18 and the Nevada Assembly clearing it on April 19 with no legislator voting against it. This allowed Sisolak to sign it on Earth Day, April 22.
Nevada’s previous renewable energy mandate required 25 percent of the electricity utilities delivered be generated by renewables sources such as geothermal, solar, and wind by 2025.
Sisolak’s signature made Nevada the fourth state in the United States to commit to 100 percent carbon-dioxide-free energy, joining California, Hawaii, and New Mexico.
Following Voters, or Leading?
Nevada voters passed a ballot initiative, Question 6, pushed by Nevadans for a Clean Energy Future, a climate interest group funded by California billionaire and progressive activist Tom Steyer, in the November 2018 midterm elections. Question 6 mandates at least 50 percent of the electricity provided by utilities in the state come from renewable sources by 2030.
Question 6 did not become law with the initiative’s initial approval, as Nevada requires any constitutional amendment to pass in two consecutive elections to be ratified. Absent the legislature’s action, voters would have had to approve the renewable mandate amendment again in the 2020 election before it could have taken effect. In the past, voters have rejected ballot initiatives upon reconsideration during such follow-up elections.
Whether the initiative will now appear on the ballot is unclear, but if it is and voters reject it during their second vote, it could mean trouble for the new law. If voters reject the renewable energy constitutional amendment in 2020, those who object to the bill could challenge the new law in court, arguing the legislature should not impose a mandate voters explicitly rejected.
Slow Adoption, Fast Inflation
Research continues to indicate imposing ever-higher renewable energy mandates (REMs) on utilities results in substantially higher electricity prices for businesses and homeowners.
A study by the Energy Policy Institute (EPI) at the University of Chicago found seven years after REMs are enacted, on average renewables’ share of electricity generation increases by only 1.8 percent, yet retail electricity prices rise by 11 percent. After 12 years, the study found, as renewables’ share of electricity generation has increased by 4.2 percent, electricity prices have risen by 17 percent.
The EPI study is one of many showing REMs dramatically increase retail electricity prices, says Tim Benson, a policy analyst with The Heartland Institute, which publishes Environment & Climate News.
“Altogether, the total extra electricity costs of renewable mandates to consumers in the states enacting them are $125.2 billion,” Benson said. “EPI’s study also shows reducing carbon dioxide emissions through a renewable mandate costs between $130 and $460 per ton of carbon dioxide abated.
“These increased costs, at the low end, are almost three times higher than the social cost of carbon estimated by the Interagency Working Group set up by the Obama administration, which it estimated at roughly $46 per ton for 2020,” Benson said. “Moreover, it should be noted that whether there is a ‘social cost’ imposed by carbon dioxide emissions at all is very debatable.”
The legislature’s decision to increase the state’s renewable mandate dramatically will almost certainly be bad for Nevada’s electricity consumers, says Eric Eisenhammer, founder of the Coalition of Energy Users.
“As an advocate for energy consumers and jobs, the legislature’s decision is disappointing,” Eisenhammer said. “Other states have already repealed their renewable mandates to protect consumers, while others, like California, that have increased their mandates have seen costs go through the roof and their industrial base decimated.
“Regardless of the merits of the proposal, Nevada voters were expected to decide its fate at the ballot box in 2020, thus politicians in Carson City should not have usurped voters’ choices and made this decision now,” Eisenhammer said.
The poor suffer the most when energy prices rise, says Benson, meaning the decision to enact SB 358 is a direct assault on low-income people.
“If the state legislators care about the plight of the poor, they should not mandate the use of renewable sources in electricity generation, because such mandates raise energy costs, which disproportionately harms low-income families,” Benson said. “To help Nevada’s poor and the state’s business environment alike, instead of trying to increase renewable mandates, legislators should repeal them.”
Kenneth Artz (email@example.com) writes from Dallas, Texas.
Michael Greenstone, Richard McDowell, and Ishan Nath, “Do Renewable Portfolio Standards Deliver?” Energy Policy Institute at the University of Chicago, April 21, 2019: https://www.heartland.org/publications-resources/publications/do-renewable-portfolio-standards-deliver
Tim Benson, “Research & Commentary: Renewable Power Mandate Would Be Too Costly for Nevada,” The Heartland Institute, October 30, 2018: https://www.heartland.org/publications-resources/publications/research--commentary-renewable-power-mandate-would-be-too-costly-for-nevada