In 2008 Gov. Deval Patrick signed the Green Communities Act, seeking to increase energy efficiency and development of clean energy technologies by, among other things, imposing quotas on our public utilities for renewable energy generation. Three years later the American Council for an Energy-Efficient Economy pronounced Massachusetts the most energy-efficient state in the nation. Good news in a vacuum, but at what price?
Attorney General Martha Coakley recently announced the results of a cost analysis for implementation of the GCA. While she found some benefits, specifically that uptick in efficiency, she also determined that those benefits come at a staggering cost: $4 billion over the next four years (never mind the last three), resulting in a projected increase of 7 percent in our already sky-high cost of energy delivery.
Some perspective on that $4 billion figure: Using the Patrick administration’s estimated casino revenue ($300 million per year from three casinos), we’d need 40 full-scale casinos operating for a year to pay for implementation of Green Communities.
Not that the astronomical cost of the Green Communities Act will be funded by gaming. It will be funded by individuals and businesses who already pay among the highest energy costs in the country.
We will see a $4 billion increase in the cost of our energy, tantamount to the single largest tax increase in our history, not because the actual cost is increasing, but because policies deliberately adopted by our state government are driving those costs ever upward, with little tangible benefit (beyond stroking of political egos) to show for it.
And let’s not kid ourselves that this outcome is unforeseen, or even unintended. In a rare moment of campaign trail candor, then-candidate Barack Obama acknowledged in 2008 that his energy proposals would cause electricity costs to “necessarily skyrocket.” As a direct result of policy designed by the president’s ideological brethren here in Massachusetts, we are seeing a micro example of that “skyrocketing.”
Ask any Massachusetts Democrat about energy policy, and likely as not the answer will begin and end with renewable energy. The trouble is, with current technology no renewable generation source is anywhere near so cost-efficient as traditional sources, including comparatively clean and suddenly plentiful natural gas.
In her recent remarks Coakley noted that with incentives provided in the GCA, renewable generation projects in Massachusetts are guaranteed a 4 percent return. So who subsidizes that 4 percent return for projects – like Cape Wind –— that could not hope to be profitable without that government guarantee?
We do. The delta between loss and 4 percent return goes into that $4 billion pot of cost.
None of this is to say that hope for a future where renewable energy sources obviate the need for fossil fuels is misplaced, or that there isn’t a role for reasonable government support of viable technologies. But politicians need to stop pretending that right now, in the present, renewable energy is part of the solution to our very real energy cost problem.
The truth is precisely the opposite, as illustrated so starkly by the attorney general’s report. Today, under current policy, so-called “green” mandates are part of the cost problem, not part of the solution.
Dan Haley is a Boston attorney.
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