Renewable Energy Could Have Big Impact on Alabama Jobs, Electricity Rates

An editorial submitted by Lance Brown, Executive Director of PACE, the Partnership for Affordable Clean Energy.

A renewable energy proposal in Washington, D.C., if passed into law, could have a major impact on jobs and electricity rates in Alabama. The proposal creates a national Renewable Portfolio Standard (RPS) that would require all states to produce 20% of their electricity from renewable sources by 2021. Renewable energy generation would have to begin immediately.

A national standard for renewable energy might sound good on the surface, but when you look at our options for meeting the standard, you realize that states like Alabama and others across the Southeast really suffer compared to other places.

My organization, the Partnership for Affordable Clean Energy (PACE), is a coalition of the state’s manufacturers, workers, small businesses, and consumer advocates. We estimate that the proposal could cost Alabama electricity ratepayers as much as $380 million per year, if not more. Under the current proposal, Alabama power producers would have to generate almost 13 million megawatt-hours from renewable sources like solar, wind, and biomass (organic materials such as wood).


The current RPS proposal, sponsored by Sen. Jeff Bingaman (D-NM), would not allow states to count power generated by existing hydroelectric plants toward the new standard. Why is that important? Hydroelectric power is one of the Southeast’s most plentiful renewable sources of energy. In fact, Alabama ranks #5 in the nation in hydroelectric generation, producing more than 5 million megawatt-hours from hydroelectricity last year. That provision of Bingaman’s proposal alone would cost Alabama electricity ratepayers about $137 million per year, and will cost the Southeast about $700 million annually.

In short, the Bingaman proposal requires Alabama to produce 20% of its energy from renewable sources, but won’t allow us to include our greatest source of renewable energy today – hydroelectric. The bottom line is that families like yours and mine are soon going to be paying heavy penalties to the government for not meeting this unrealistic standard.

Under the proposal, power producers would pay a 3¢ per kilowatt-hour penalty for all power that doesn’t meet the national standard. PACE calculates that this ‘Alternative Compliance Payment’ would amount to $380 million each year for Alabama. Across the Southeast, the penalty could be as high as $5 billion annually. This sum would be passed through to residential and industrial electricity customers, resulting in higher power bills for everyone.

With hydroelectric not an option, Southern states would have to rely on solar, wind, and biomass to meet a 20% standard. However, the U.S. Department of Energy reports that very little solar or wind capacity exists in Alabama today. Even U.S. Energy Secretary Steven Chu recently testified that biomass is the Southeast’s only viable option for meeting a renewable energy standard. What does that mean?

Major Alabama industries such as the state’s fourteen pulp and paper mills currently rely on forest resources for raw materials. These industries support tens of thousands of jobs for Alabamians, not to mention jobs in related forest products industries. Higher demand for forest products, as well as higher prices for raw materials, could force the closure of some of these mills. The same is true across the Southeast where forest industries thrive.

We need to be looking for the most affordable way to have a clean energy future, one that doesn’t cost us jobs and saddle the Southeast with drastically higher electricity prices. We need to ensure that whatever renewable energy policy we enact actually helps the environment here in Alabama, and doesn’t simply export our dollars to T. Boone Pickens and the energy giants of the Midwest and West. But right now, lawmakers don’t seem to be headed in that direction. Instead, they are cherry-picking favored energy sources while leaving others out, all to our detriment.

I created PACE because the current energy proposals are not fair to the Southeast, where I live and work. The bottom line is that working families and businesses here don’t deserve to pay more under a renewable energy standard, while others pay less. If you agree, I encourage you to sign the PACE Petition at www.energyfairness.org.

Lance Brown is Executive Director of PACE, the Partnership for Affordable Clean Energy, a non-profit organization. Headquartered in Montgomery, Alabama, PACE is fighting for federal energy policies that are affordable for working people and fair to the Southeast. Learn more at www.energyfairness.org.

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