Lawsuit Seeks to Uncover True Costs of Green Energy Mandates
NLPC Associate Fellow Fred N. Sauer, in photo, filed a lawsuit on June 6 against the Missouri Public Service Commission to make it disclose what is happening to all the money being paid in artificially-high renewable electricity prices. The suit is an outgrowth of Sauer’s 2013 Special Report titled, The Carnahan Wind Deal: Crony Capitalism is Missouri.
Here’s the background. On May 4, 2008, Missourians For Cleaner, Cheaper Energy filed a petition with the Missouri Secretary of State, Robin Carnahan, to put Proposition C, the Clean Energy Initiative on the November 2008 ballot in Missouri. This proposition created a renewable electricity standard in the state. The standard requires utility companies to gradually increase their usage of renewable energy annually until 15% of the energy used in the state is renewable.
This proposition does not result in a trivial sum of money. In the base year, 2011, relevant electricity revenues were $5.032 billion and if electricity usage would grow 3% per year into the future, here are the mandated annual and cumulative expenditures for renewable energy for the following 10 year intervals in billions of dollars.
When you see the extraordinary amount of money involved in mandated purchases of renewable energy your curiosity is piqued!
Who is promoting this? Well in the case of this Proposition C the largest contributor, who gave $100,000 to promote it, was Wind Capital group. And, what a surprise, its founder in 2005 was Tom Carnahan, whose father Mel Carnahan was a former Democrat governor of Missouri. And whose other son Russ served for eight years as Missouri’s 3rd district congressman. One does not have to be cynical to wonder about all these Carnahans and the billions of dollars that Missouri electricity consumers are being compelled to spend on renewable energy.
If you want to know how Ameren, Missouri’s largest electric utility spends its money on non-renewable energy, their SEC regulated annual report will tell you all the details about revenues, expenses, and returns to their stockholders. Under Proposition C, the same Ameren is supposed to produce an Annual Compliance Report, regulated by the Missouri Public Service Commission, on how they complied with their mandated purchases of renewable energy.
But here we hit a stone wall! The Missouri Public Service Commission has permitted the critical data to be redacted from the report. The simple reality is that trying to discover how money flows to windmills and who gets what money is like a black hole.
Thus renewable energy sort of has the attributes of a Ponzi Scheme. Missouri voters were understandably happy to vote for “cleaner and cheaper” energy. Who wouldn’t be? And if what they thought, that cleaner and cheaper energy was really being provided, why would the Missouri Public Service Commission have allowed essential financial information to be redacted from Ameren’s compliance report. Yet, you cannot find out anything about who or what are receiving, at first hundreds of millions of dollars, and eventually billions of dollars that renewable energy producers are getting from everyone who uses electricity. Electricity prices are going up and up. Thus mandated purchases create a very regressive “tax”.
Here is an expert summary of the economic burdens resulting from attempts to generate renewable energy:
MIAMI – According to UN Secretary-General Ban Ki-moon, “Climate change harms the poor first and worst.” This is true, because the poor are the most vulnerable and have the least resources with which to adapt. But we often forget that current policies to address global warming make energy much more costly, and that this harms the world’s poor much more.
Solar and wind power was subsidized by $60 billion in 2012. This means that the world spent $60 billion more on energy than was needed. And, because the total climate benefit was a paltry $1.4 billion, the subsidies essentially wasted $58.6 billion. Biofuels were subsidized by another $19 billion, with essentially no climate benefit. All of that money could have been used to improve health care, hire more teachers, build better roads, or lower taxes.
Forcing everyone to buy more expensive, less reliable energy pushes up costs throughout the economy, leaving less for other public goods. The average of macroeconomic models indicates that the total cost of the EU’s climate policy will be €209 billion ($280 billion) per year from 2020 until the end of the century.
Similarly, environmentalists boast that households in the United Kingdom have reduced their electricity consumption by almost 10% since 2005. But they neglect to mention that this reflects a 50% increase in electricity prices, mostly to pay for an increase in the share of renewables from 1.8% to 4.6%.
The poor, no surprise, have reduced their consumption by much more than 10%, whereas the rich have not reduced theirs at all. Over the past five years, heating a UK home has become 63% more expensive, while real wages have declined. Some 17% of households are now energy poor – that is, they have to spend more than 10% of their income on energy; and, because elderly people are typically poorer, about a quarter of their households are energy poor. Deprived pensioners burn old books to keep warm, because they are cheaper than coal, they ride on heated buses all day, and a third leave part of their homes cold.
Is any renewable energy cheaper or cleaner? Was proposition C’s title completely misleading as presented to the Missouri Voter? And who approved the language of the ballot summary? The Secretary of State Robin Carnahan, whose brother could have been the beneficiary of compelled renewable energy purchases through his ownership of Wind Capital Group. Robin Carnahan should have recused herself from having anything to do with Proposition C’s ballot summary.
On June 6th, Fred Sauer filed a lawsuit against the Missouri Public Service Commission to make them unredact the detailed sections of Ameren Electric’s Annual Compliance Report so that the citizens of Missouri can obtain transparency about what is happening to all the money they are paying in artificially high renewable electricity prices and who is getting it.
Without such transparency it is highly probable that something is going on about which the public would be very unhappy. For there are several dominant characteristic of renewable energy:
- An over-hyped, if not irrational ideology about carbon dioxide causing global warming.
- It is propagated by politicians like Al Gore and President Obama to raise campaign cash from its beneficiaries.
- It results in a massive transfer of wealth from all users of electricity to owners of renewable energy producers.
- There is a calculated lack of transparency and obfuscation in the flows of money.
- Too many recipients of stimulus money and loan guarantees, like Warren Buffet, Elon Musk, and Missouri’s Carnahans, rely on political contributions and connections.
Forget the Ponzi Scheme, the better question about renewable energy would ask, if it is not an extremely sophisticated fraud pouring out the U.S. Treasury as payola for the politically-connected.
 Project Syndicate : The Poverty of Renewables 3/17/14