Everyone appears to be an expert at running a utility in New Mexico these days. Everyone from Environmentalists to the League of Women Voters seems to think that shifting our power generation from coal to “cleaner sources of energy.”
I wrote a letter that appeared in the Albuquerque Journal Business section on Monday that critiqued the economic impact of such a shift and what it might mean for energy consumers.
PNM may be winning plaudits from environmental groups for its renewable energy procurement plan, but I think the story would be different – and less positive – if the voices of rate payers and taxpayers who bear the brunt of the costs of these policies were added to the mix.
While the direct cost of the “renewable” mandate will add “just” $1.40 to each customer’s bill monthly, for now, our analysis concludes that during the current decade ending in 2020, the renewable portfolio standard and associated laws and regulations will cost New Mexicans an additional $2.3 billion in higher electricity costs.
These subsidies and added costs are just the tip of the iceberg when it comes to solar. The recent failure of Schott cost New Mexicans $16 million and the well-publicized Solyndra failure cost taxpayers more than $500 million. According to the Congressional Budget Office, so-called “renewables” receive $16 billion (of $24 billion total) in federal subsidies to the energy industry.
Wind and solar consume a vast majority of energy subsidies, but generate less than 10% of total renewable energy output.
Wind and solar are not “new” technologies. They have been used by humans at least as long as have fossil fuels. Government subsidies and mandates are a losing game. If a given energy source is effective, consumers will embrace it. If not, they will prove to be far less “sustainable” than other forms of energy.