The American Wind Energy Association and the Solar Energy Industries Association dropped out of the American Legislative Exchange Council, because of what they say are its efforts to wipe out state level clean energy programs.
The American Legislative Exchange Council has become a clearing house for conservative and so-called free market legislation. It brings together businesses and about 2,000 state lawmakers from around he nation, who then introduce the legislation.
The renewable business groups though that they might benefit by joining the groups panned by liberal and environmental groups. They thought that since ALEC is committed to the free market they might have a fair shot, even though both industries, like the nuclear industry depend for the time being on subsidies.
In October ALEC adopted the Electricity Freedom Act, model legislation to repeal state’s renewable portfolio standards. These standards require regulated electric utilities to get a percent of their power from renewables.
That made the wind and solar groups bolt.
You won’t see this in Idaho because our legislature never passed these standards. Even without it Idaho has developed as much renewable energy as many of its neighbors with renewable portfolio standards.
What makes this interesting is that these standards have allowed the utilities in other states, which have monopoly over energy markets in their area, to get the renewable energy credits worth millions of dollars when they get the power. Idaho utilities didn’t get them at all until the Idaho Public Utilities Commission gave the utilities half of th credits from all wind and solar projects over 100 kilowatts last year.
The American Wind Energy Association and the Solar Energy Industries Association, which represent businesses that actually have to compete in the free market, unlike regulated utilities, decided they would take their subsidies and leave. The Electric Freedom Act gave freedom to the monopolies whose rates of return are set by government regulators.
This gets us back to the issue of the free market. Subsidies come from political decisions that place value in one technology over another. This picking of winners is considered an inefficient way to get the best technology but sometimes is necessary.
The same is true of what economists call rent-seeking. When government hands out privileges to businesses, their owners shift their resources from providing goods and services to playing politics.
Economists say rent-seeking is socially wasteful. But it sure is fun to watch.