News Update: Finance & Commerce ran an article on the study we released this week (links to the study and a summary are below). While we take issue with the comments made by Michael Noble at Fresh Energy (there’s a surprise), we appreciate the coverage. Judging by the comments to the article, the readers at Finance & Commerce share our skepticism about renewables and our sense of humour. You can read the article and comments here.

Study: Minnesota’s Renewable Energy Mandate Will Damage State Economy and Environment

FOR IMMEDIATE RELEASE
Wednesday, April 20, 2011
Contacts:
Kim Crockett, kimc@mnfreemarketinstitute.org (612)388.2820

Paul Chesser, paul.chesser@atinstitute.org (202)670-2680

Frank Conte, fconte@beaconhill.org

As the new state legislature scrutinizes Minnesota’s restrictive energy policies, a study commissioned by the American Tradition Institute and the Minnesota Free Market Institute provides compelling reasons for lawmakers and Gov. Mark Dayton to reverse the state’s damaging Renewable Portfolio Standards (RPS).

The study found that Minnesotans would pay $15 billion more for electricity between 2016 and 2025 because of the state’s RPS, as alternative energy is more costly and unreliable than conventional sources such as coal or natural gas. Meanwhile there will be negligible environmental benefit, as it is unlikely that use of renewables – especially wind, which the state mandates as a large percentage of its RPS – actually reduces greenhouse gas emissions. The study was prepared by economists at the Beacon Hill Institute at Suffolk University in Boston.

“In 2007, Minnesota embraced the proposition that tax subsidies for so-called ‘clean’ energy combined with forced quotas would magically create clean, abundant and affordable energy—as well as thousands of ‘green’ jobs,” said Kim Crockett, president of the Minnesota Free Market Institute. “Our study demonstrates that the promise behind the RPS mandate is an illusion. It takes a first-class, first world economy to protect the environment. ”
Other insights from the ATI/MNFMI report:

· Minnesota’s electricity prices will increase by 24 percent by 2025
· By 2025 the state will lose a net of 11,271 jobs
· In 2025 the RPS mandate will reduce annual wages by an average of $736 per worker
· Due to higher home energy costs, in 2025 annual real disposable income will fall by $1.36 billion

“Minnesota’s renewable mandate is an invitation for business and industry to leave for lower-cost states,” said Paul Chesser, executive director of the American Tradition Institute.“The heavy requirement upon Xcel Energy to derive 25 percent of sales from wind power will be a jobs killer.”

The report concludes that Minnesota’s RPS law, because of higher costs for doing business, will not reduce global greenhouse gas emissions but rather send jobs and capital investment outside the state.  As Minnesota’s lawmakers review energy policy for the 21st century, they need to take a critical look at the RPS before electricity costs spiral out of control.

See the Full Study of the Effects of Minnesota’s Renewable Portfolio Standard on the State Economy. (PDF)

You can also read Major Highlights here. (PDF)