AWEA Meets Tony Soprano and his TEA Party Gang

You would think from all the wailing and lamenting resulting the mid-term elections that Tony Soprano had rounded up the AWEA leadership and threatens to whack them for their sins real and imagined.

It is true that AWEA played every card they had to get Congress to adopt a national renewable energy standard and cap and trade legislation to protect their franchise.  The wind and solar lobbies won more battles than they lost over the years with investment tax credits, production tax credits, loan guarantees, Federal stimulus awards and let’s not forget the state renewable portfolio standards.

But now the politicians who had been wined and dined and pressed to perform were out and a whole new gang of politicians showed up in the neighborhood.  K Street is busy writing checks and covering their backsides to get in synch with the new Capitol Hill gang.

What does this mid-term election mean for renewable energy?

Renewable energy is ‘running out of other people’s money’ and fears it must learn to adjust to a new world where least cost, best fit may once again be the regulatory standard for power generation projects.  It will not come crashing down all at once but the subsidies and set asides, feed-in-tariffs and RPS goals have peaked.

We still love the idea of the green economy, but we just can’t afford to keep subsidizing it in our current reality.  The Republican majority in the House of Representatives and their TEA party tormenters will hold many feet to the fire in an attempt to rein in spending and stop the listing of the ship of state.  The wind and solar lobby will not be the only ones taking a walk down that dark ally with Tony and his gang.

So it’s out with the old and in with the—-errr, well old again as in old fashion fiscal responsibility.

Here are some signposts of this new Era of Fiscal Responsibility ahead:

  • We Achieved our RPS Goal, Let’s Celebrate. As more states that adopted renewable portfolio standards reach their intended targets, typically 20%, will they declare victory and celebrate or follow California’s lead and up the ante to 33% even if it is not achievable.
  • The Bakersfield Effect and Rising Electricity Rates. As the cumulative cost of renewable energy with their above-cost resources plus smart grid and smart meter costs, greenhouse gas emissions reduction costs, added transmission costs, carbon reduction fees (California) all pile on as rate cases will the state public utility commissions risk the Bakersfield Effect and keep on raising rates?
  • Least Cost, Best Fit Standard. If you begin to hear familiar phrases like portfolio risk, power generation mix, reliability and least cost choice for marginal power generation, you will recognize that the days of adding renewable energy without regard to what it costs are over. State regulators invented this LCBF standard to force utilities to abandoned their overly costly nuclear power plants in an earlier era and embrace wholesale competition where lower cost resources like demand side management, natural gas combined cycle and even coal fired generation competed for a place in the supply stack.
  • Clean Energy Standard. This is code for if you people at AWEA have a prayer of keeping your renewable energy tax credits you better accept the reality that we are going to redefine your renewable energy standard (RES) to include nuclear power,  hydropower and clean coal technology as part of a new and improved clean energy standard (CES) to replace the old 15% renewable energy standard you’ve been pushing. We might compromise and increase the CES to say 33% to make room for a few nukes and some clean coal. We want a competition between all these clean energy technologies and will choose the least cost, best fit mix for our power future.  Don’t you just love competition?

Change on Capitol Hill means an offer you can’t refuse. It means a return to least cost, best fit, to the merits of real competition in wholesale power markets, the value of energy efficiency and balance in our energy and environmental policies that focuses of delivering reliable energy at the lowest responsible cost consistent with our environmental goals.

Oh yea, one more thing:  We expect the lights to stay on at prices we can afford.  Or else.