Tuesday, August 19, 2008

Senate Republicans Still Deny RPS Will Create Jobs

Rumor in the Lansing rags has the legiscritters close to an agreement on the energy bills, but a statement released yesterday from Sen. Cameron Brown, vice chair of the Senate Energy Policy and Public Utilities Committee, shows that the Senate Republicans are still in deep denial about the need for a renewable portfolio standard for Michigan. To show how far they are willing to go to deny the potential to create jobs in Michigan, Brown calls alternative energy job creation a "myth", and uses a disingenous math trick to try to fool the public.

The National Renewable Energy Laboratory, described as the nation’s primary laboratory for renewable energy and energy efficiency research and development, estimates that a community can expect between two and five full-time jobs to be created with a 50-100 megawatt wind farm. As the most cost effective renewable energy, wind is expected to make up the majority of Michigan’s proposed RPS mandate.

To meet a 10 percent RPS, it is estimated that the state would require 3,680 megawatts of wind energy. Assuming approximately 73 wind farms producing 50-megawatts each would be necessary to meet the 10 percent mandate, Michigan residents can expect roughly 365 full-time jobs to be created. When taking into consideration the $8 billion in electric rate increases estimated by advocates of the mandate, each new job would cost customers approximately $20 million.

“Certainly, we should do everything possible to encourage increased usage of renewable energies,” Brown said. “But Michigan residents should expect much more than 365 new jobs in exchange for electric rate hikes of $8 billion or more.

By focusing solely on running a wind farm AFTER it is built (at least I believe that is what he is alluding to here), Brown wants you to overlook all the OTHER categories of job creation that the RPS would bring - jobs that manufacture wind turbine parts, jobs that build wind farms in the first place, jobs that maintain and upgrade the power grid to bring this online, etc. and so on. From manufacturing all the way down to customer service, the list is endless of the spin-off industries and jobs that renewable energy would create.

What is astounding is the fact that the Senate Republicans would go so far out of their way to come up with this convoluted formula to try to deny this truth. Need more proof? Doesn't take long to find it. Here is yet another example of the job creation that our Senate Republicans are reaching so hard to deny - take the case of Colorado and their 20% by 2020 RPS. Last Friday, they announced that Danish wind turbine manufacturer Vestas would be building two more production facilities in the state...

Among the signs is the arrival of Vestas, a Danish wind turbine company, which announced Friday the construction of two more manufacturing plants and 1,350 new jobs, bringing the company's total in Colorado to 2,450.

... and with just one company, Senator Brown's numbers on job creation are shown to be the misleading fallacy that they are. And when you look at the story of Colorado and how its voters had to mandate a RPS for the state because the legislature wouldn't move on it... it becomes clear what needs to be done here.

Xcel, a leading Colorado energy company, fought against instituting a renewable portfolio standard at first. But a funny thing happened on the way to creating jobs and investment - the voters pushed it through, and Xcel now embraces the RPS whole-heartedly, and the Colorado legislature has voted since then to increase that "mandate" that our Senate Republicans claim would be so horrible.

State leaders are thrilled with the economic benefits that have come with the hundreds of new research and manufacturing jobs in pursuit of alternative power.

Hundreds? Now it is in the thousands.

Xcel fought the RPS. They now regret it. The year was 2004 - yet another indication of how far behind we are on this.

After legislative efforts failed, proponents of renewable energy turned to the ballot that year. The initiative, Amendment 37, required the state's biggest utilities to generate 10 percent of their electricity from renewable sources. Advocates found themselves facing off against Xcel, which said it feared for its bottom line.

"We ended up opposing that amendment. In retrospect, I wish we hadn't," said Frank Prager, Xcel's vice president for environmental policy. He said utility companies are inherently conservative, yet find themselves facing a transformation in an industry that, as he put it, has changed little since Thomas Edison's time.

Xcel found that federal tax credits worked to their advantage, Amendment 37 (yes, Colorado voters raised their own rates willingly) provided the capital needed to invest in the technology - and the growth in the industry took off. Colorado then said, "More, please. We like mandates." And getting there was easier than they thought.

By the end of 2007, Xcel had met Amendment 37's goal and endorsed Ritter's request to double it to 20 percent by 2020. That measure passed the Colorado legislature easily: With the utility on board and public sentiment clear, the bill collected 50 sponsors in the 65-member House.

Executives at publicly traded Xcel stress their twin desires to make money and to insulate the company from the risks of unproven technology. As Prager put it during an interview in the company's downtown Denver headquarters: "It's absolutely essential that the state offer us something that makes it worth our while to be green."

Amendment 37 allows utilities to collect a fee from customers to invest in renewable fuels; it averages $12.72 a year for a typical homeowner with a monthly bill of $73. When the renewables goal doubled last year, so did the fee. Prager said the fee has provided Xcel $37.6 million between March 2006 and July 2008 for capital investment in wind and solar.

Spent a little money, got thousands of jobs and millions in investment. And for the anti-coal folks out there, an added bonus occurred as Xcel has moved to alternatives.

Meanwhile, Xcel's latest plan, filed with the Colorado Public Utilities Commission, calls for retiring two of its aging coal-fired power generators.

Colorado is moving rapidly in the right direction, and it has paid off. Senator Brown may wring his hands over the increased energy cost to Michigan consumers, but no one yet has shown a scenario where energy costs are going to magically decrease anytime soon. Face it people, costs are going to increase no matter what we do - we might as well take that money and create jobs, rather than keep sending it out-of-state to buy coal and other energy needs. And as far as the claims that these bills will create a monopoly for DTE and Consumers by capping competition at 10%, one question still remains: Why aren't we seeing that competition now? Where are these energy providers that would somehow be denied a chance to sell their product? Currently, at last report, alternative providers were at 4%. There is still room for growth here in Michigan, and if we hit the ceiling, this is something that can be revisited in the future. No one likes the idea of handing the keys to DTE and Consumers, but no one has moved towards creating a bigger playing field as it stands now.

Are there questionable things in this energy package? Yes there are. Big ones. And we will have to deal with them as consequences arise. But to do nothing at all would send Michigan further down the list of states that are currently considered by new and existing companies for investment. Bottom line is: Every day that we wait, job providers are going to states that have a renewable portfolio standard. There is no getting around that fact, as much as the Senate Republicans want to deny it. Matt Marsden can cry "politics" all he wants, but it is pretty apparent to everyone just who is playing politics when they have to keep mentioning election season as an excuse for their own inaction.

Maybe we will get a surprise and this will get done soon, but Senator Brown’s elaborate ruse seems to indicate otherwise – and that makes states like Colorado very happy.

“Henry Ford didn’t need a government mandate to sell cars, and Kellogg’s didn’t need a government mandate to sell cereal,” Brown said. “When renewable energies reach a point where they are sufficiently affordable and efficient, they won’t need a government mandate to sell their products either.”

Yes, perhaps Henry Ford should have waited until someone else made the cars first. Sounds like a plan - if you're a Senate Republican.