Opinion: Daily Journal

Citizens, Not Cronies, Are Top Stakeholders in Energy Debate

An interesting item suddenly appeared this week in the N.C. Senate farm bill. This item made its appearance a few short days after the new state budget was finally approved. Among other things, the new budget ended North Carolina’s longtime, exceedingly generous 35 percent investment tax credit for solar energy.

The farm bill addition was tucked into pages 18-19 of a proposed committee substitute to the original legislation. It would establish an energy study committee. But it wouldn’t establish a State Energy Policy Study Committee.

No, what it would establish is a “Renewable Energy Economic Development Study Committee.” In other words, a committee to decide how best to find an end run around the loss of the investment tax credit and keep throwing other people’s money involuntarily at unsustainable renewable energy projects.

Just from the name, one can tell the thumbs are on the scale. If that wasn’t enough, reading the committee makeup makes it fairly certain the committee findings would be geared toward more artificial taxpayer support of renewable energy.

All the members except one would be “experience[d] in renewable energy.” The other member would be a representative from the Public Staff, which is supposed to represent consumers but has been derelict too often in that respect to be trusted.

This would be what’s known as a “stakeholders” study committee, in which representatives of the various “communities” with a supposed stake in the issue get together and decide what’s best for everybody. Those familiar with politics know how this goes: It’s basically cronyism gussied up with a doily of process.

A wildlife corollary would be a “Sheep Eating Study Committee” with the “stakeholders” being members of the red wolf, gray wolf, fox, and coyote “communities.” The sheep at the table would bleat and bleat about being the top stakeholder, but that’s not how the process works.

We electricity consumers are the sheep at this table of wolves. Again, it’s not an energy policy study committee. It’s not just a renewable energy study committee. It’s a renewable energy economic development study committee. Which is Governmentese for a “throwing taxpayer money at renewable energy” study committee.

The biggest community with the most at stake — the citizens themselves — are rarely allowed at the table (on it, fine; at it, no). We, the taxpayers and captive electricity ratepayers, are the sheep on this table.

A responsible energy policy study

As my recent Spotlight report on renewable energy concluded:

[S]tate leaders should cut through the noise of slanted, rent-seeking tailored industry reports aimed at influencing them to produce public policies favorable to their industry at ratepayer/taxpayer expense. A thorough, comprehensive study of North Carolina energy policy is needed — one that bears in mind that the top stakeholders are ratepayers whose chief interest is least-cost, reliable power at the flip of the switch.

An actual, responsible study of North Carolina energy policy would start by recognizing that captive ratepayers — people who right now are given no choice in their electricity provider and therefore cannot shop for better prices or service bundles — deserve a return to the state’s former policy of least-cost, reliable electricity.

It would also take a full accounting of costs and benefits. (See this newsletter for a discussion and additional reading.)

It should be a committee of elected representatives of the people, not unaccountable members of the special-interest “communities” who would stand to benefit by steering public funds and policy environments their way. Let the accountable representatives hear from various groups, but let their decisions be governed by what best serves the interests of captive ratepayers.

For an example of a better, more responsible approach to studying energy costs and benefits, look at the study proposed by the NC Energy Ratepayers Protection Act, which would have also studied “known and measurable” costs and benefits. Those would include grid issues as well as standby generation issues unique to nondispatchable renewable energy sources such as solar and wind.

Jon Sanders (@jonpsanders) is Director of Regulatory Studies for the John Locke Foundation.