2.11.08

Evaluation of Missouri Propositions: Proposition C

Language - Shall Missouri law be amended to require investor-owned electric utilities to generate or purchase electricity from renewable energy sources such as solar, wind, biomass and hydropower with the renewable energy sources equaling at least 2% of retail sales by 2011 increasing incrementally to at least 15% by 2021, including at least 2% from solar energy; and restricting to no more than 1% any rate increase to consumers for this renewable energy? The estimated direct cost to state governmental entities is $395,183. It is estimated there are no direct costs or savings to local governmental entities. However, indirect costs may be incurred by state and local governmental entities if the proposal results in increased electricity retail rates.

A "yes" vote will amend Missouri law to require investor-owned electric utilities to generate or purchase electricity from renewable energy sources such as solar, wind, biomass (including ethanol) and hydropower. The required renewable energy sources must equal the following percentages of retail sales: 2% by 2011; 5% by 2014; 10% by 2018; 15% by 2021. Of the total renewable energy sources required to be sold, at least 2% shall be solar sources. Also, any rate increase to consumers resulting from this measure must be no more than 1%.

Background – When oil hit $125 per barrel, the EU and the US Congress rushed to mandate ethanol be included in gasoline. The effects—the price of corn shot up. Keep in mind, the US has had a surplus of corn for many years. Government buys up this corn to keep the price up. Then they sell this corn to third-world countries at a loss. The effect is that the local agricultural industry is devastated. When the ethanol became mandated, this meant the US and other countries stopped exporting excess corn. Riots occurred in many African countries. Since then, the EU has backed off its mandate, and changed the language to prevent “food commodities” being substituted for energy.

Issues / Implications – The problem is, most renewable energy loses money. Solar, wind, etc. all costs significantly more. Many renewable energy companies are existing from one government-rebate to the next. While this seems to help wean us off coal and oil, it does so at the expense of capitalism. Think about it—the energy companies (AmerenUE, Laclede Gas) are already regulated. They can’t increase rates without approval from the state. Now they have to find other energy sources without raising rates. Long-term they become unable to compete. Government ends up having to take over more of the industry, or begins competing against the private sector, in a step toward further nationalization of corporations. If the State would just lay off, renewable energy is going to become cheaper as it becomes cost-effective. Mandating it will only hurt us economically. And with 7.2% unemployment in Missouri—and how many thousands of others teetering on bankruptcy (because they can gamble everything away without limits, and because many are barely making mortgage payments as is it)—this initiative will hit taxpayers because it is the government who will end up subsidizing these measures with taxpayer’s money.

CONCLUSION: I plan to vote NO for this bill.

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