Arizona Eagletarian

Arizona Eagletarian

Friday, May 10, 2013

Why, really, does the Goldwater Institute hate Clean Energy?

On May 7, Goldwater Institute staffer Byron Schlomach published a story titled Time to End the Costly Renewable Energy Mandate.

Since Schlomach's piece is full of, at best, half-truths, I am compelled to set the record straight.

First of all, we have to understand the perspective both Schlomach and his sources come from. Seattle Times economics columnist Jon Talton, in his blog, the Rogue Columnist, describes Goldwater Institute thus:
Goldwater's conclusions and talking points bear a close resemblance to those of think tanks seeded in virtually every state in the 1980s and 1990s by "conservative" money. They are intended to look like grassroots local organizations. In fact, they are part of the — let's put on a more precise definition — vast right-wing infrastructure. Together with Fox "News," talk radio and organizations such as ALEC, they turned formerly competitive states red, red states more extreme and even hold great power in many supposedly blue states. ALEC, you will recall, writes reactionary corporatist legislation to be passed, as is, in states throughout America. (emphasis mine)
Talton illuminates the situation further:
The trouble is that the "Goldwater" Institute is not a think tank as conventionally understood, an organization where scholars pursue research with open minds and produce material that is vigorously peer reviewed (think The Brookings Institution). Instead, it is an advocacy organization such as the NRA or the Sierra Club.
Next, consider the Beacon Hill Institute, Schlomach's first named source. Its director, David G. Tuerck, long has been in bed with the fossil fuel industry. Additionally, Beacon Hill's funders (Castle Rock Foundation and Lynde and Harry Bradley Foundation) are closely tied in with ALEC and numerous other very conservative groups, including the John Birch Society (see Talton's description of so-called think tanks seeded in many states by conservative money, above).

Now, what about Schlomach's claims? 
Beacon Hill estimates that in 2025 the ACC mandate will cost Arizonans between $239 and $626 million and from 1,500 to 4,100 jobs, with electricity prices 4 to 10 percent higher than otherwise.
Yet, Arizona’s Renewable Energy Standard and Tariff (REST) is one of the lowest in the U.S. and in the West. Colorado and California already get 20% of their electricity from clean energy, while Arizona now is only at 2%.

Schlomach cites Beacon Hill's "estimates," but shows absolutely NO basis for those estimates. Up to $626 million, he says, seemingly pulling that number out of his... hat -- that Arizona’s REST will cost consumers extra just in 2025. Already, annual fuel cost for Arizona Public Service varies by as much as $315 million from year to year. That’s the fuel bill for one utility for one year. How much does the price of sunshine vary from year to year?

Back to the question of fuel cost. APS’ fuel bill has gone up and down dramatically. Right now, in Arizona one-third of utility generated electricity is from natural gas. Given the price volatility for natural gas, we are already at serious risk for increased electricity costs.

Consider also, the fact that Schlomach fails to acknowledge the dramatic cost reductions already realized over the last couple of years for development of solar generating facilities. Might his ideological bent have anything to do with that tiny little oversight?

Put in perspective, Arizonans spend more than $7 billion/year for electricity, and 20-30% is for fuel costs. That means that every year Arizonans spend $2-3 billion for coal, natural gas and nuclear fuel. Ninety percent of those dollars leave Arizona rather than recirculate among our workers and local businesses. Meanwhile, the cost of developing solar generating capacity has dropped 70% in the last five years.

Solar generated electricity completely displaces those direct costs for fossil and nuclear fuels. Further, external costs to society for the harmful effects of fossil fuel usage completely disappear, since there is no pollution, no toxic waste. Best of all, no future risk due to potential commodity (fossil fuel) shortages.

In a sideways manner, the Goldwater piece highlights a common sense approach to electricity costs: use of life-cycle analysis. In other words, count all the costs that can be counted, including mining and transporting fuel, emissions control, pollution costs and decommissioning.

Schlomach suggests that the carbon intensity of constructing solar generating facilities is higher than for coal. 
But there’s more to consider than just costs. Renewable technologies reduce carbon emissions, but the construction and decommissioning of renewable energy facilities produces more carbon than coal and gas facilities. The carbon advantage accrues from the production of electricity.
How exactly would construction and "decommissioning" of renewable energy facilities be more carbon intensive than doing the same thing with coal and gas facilities?

On its face, that is an amazingly absurd claim. Schlomach claims to be an economist. Why does he make such absurd claims with little or no data to support them? Maybe because they are nothing more than wild ass guesses based on extreme right-wing ideology?

Another thing Schlomach, when pushing so-called “free market” fixes, fails to tell anyone is that from the beginnings of centralized electricity generating, back in the early 20th Century, markets were regulated -- not "free." And regulated for good reason – to keep utilities from exercising the power that naturally comes with monopolies. 

Our country's roots are firmly planted in capitalism and the free market system; yet economic regulation has been, and in all likelihood will continue to be, necessary to remove barriers and distortions that impede competition and to assure the greatest degree of social benefit within the system. The scope and direction of regulation, however, tends to expand and contract over time with shifts in economic conditions, prevailing ideology and market characteristics. 
For decades, the accepted belief has been that the public interest is best served with an electric industry comprised of franchised public utility monopolies that are subject to comprehensive regulation. That view has been challenged in recent years, and as a result, the electric industry is at a crossroads. It is appropriate that before debating how the industry should be structured in the future, we should look at the reasons for regulating the electric industry in the first place. Abraham Lincoln once counseled, "If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it."
The early years of the electric industry were chaotic. Cities often had competing electricity suppliers, some providing alternating current and some direct current. For instance, in Chicago in the late 1800s, 29 franchises had been granted to electricity providers. (emphasis added)

As recently as the year 2000, we saw what resulted when California deregulated its electricity markets. Rates for small businesses and residential consumers skyrocketed. In the heat of the summer, they experienced widespread rolling blackouts. Is THAT what Arizonans want their summers to be like?

When using full life-cycle analysis, solar beats coal every time. When you consider the volatility of fuel costs and the ramifications of pollution, solar makes the most sense.

Goldwater Institute’s fossil-fueled donors may hate it, but Arizonans have many reasons to love solar.


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